[*1]

Civil Court of the City of New York, Kings County, October 23, 2012

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C., Brooklyn, for plaintiff. Law Offices of Teresa M. Spina, Woodbury, for defendant.

{**38 Misc 3d at 269} OPINION OF THE COURT

Katherine A. Levine, J.

This matter^[FN*] was submitted on the unresolved issue of whether interest begins to accrue in no-fault actions at the time of filing or service of the summons and complaint, and whether the tolling of interest provisions contained in the regulations of the Superintendent of Insurance impact this determination. Here, plaintiff failed to commence the lawsuit within 30 days after receipt of defendant’s denial of claim form or payment of benefits, hence triggering the tolling of interest provisions. [*2]

Central to this determination is whether section 412 of the New York City Civil Court Act applies to no-fault actions brought in Civil Court. Section 412, entitled accrual of interest, provides:

“In any action, petition, order to show cause or other proceeding wherein interest accrues from the date of the inception of the action . . . order . . . , said entitlement to interest shall not begin to accrue until service is completed by the actual index number being properly depicted on the summons and provided to the party to be charged with the payment of interest.”

Plaintiff contends that interest accrues on the date of filing. It argues that section 412 is inapplicable because under the No-Fault Law, interest does not accrue from the “inception of the action”—i.e., when plaintiff files the summons and complaint in court—but rather 30 days after the claim or bill is submitted to the insurer. Furthermore, plaintiff contends that the tolling of interest provision removes no-fault actions from the ambit of section 412. Alternatively, plaintiff contends that the CCA is inapplicable because the provisions of the CPLR governing interest supercede the interest provisions contained in the Insurance Law and regulations.

Defendant argues that section 412 governs this matter because interest does accrue at the inception of the action, and that the date of service should trigger the accrual of interest. Defendant further argues that providers should not be allowed to obtain a windfall of interest by prolonging the time between the filing and service dates.{**38 Misc 3d at 270}

It is well established that the CPLR provisions governing interest are inapplicable to no-fault actions since Insurance Law § 5106 and the regulations promulgated thereto “supercede” the interest provisions contained in the CPLR. (Matter of Government Empls. Ins. Co. [Lombino], 57 AD2d 957, 959 [2d Dept 1977]; see Corona Hgts. Med., P.C. v Liberty Mut. Ins. Co., 32 Misc 3d 8, 10 [App Term, 2d Dept, 2d, 11th and 13th Jud Dists 2011].)

Insurance Law § 5106 (a) and 11 NYCRR 65-3.9 (a) mandate that “[first-party no-fault] benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained” (emphasis added), at which point interest shall accumulate at the rate of 2% per month on all overdue benefits. However, pursuant to 11 NYCRR 65-3.9 (c), if the plaintiff fails to request arbitration or commence an action “within 30 days after the receipt of a denial of claim form or payment of benefits . . . , interest shall not accumulate on the disputed claim or element of claim until such action is taken.” Furthermore, if a dispute has been submitted to arbitration or to the courts, “interest shall accumulate, unless the applicant unreasonably delays . . . the court proceeding.” (11 NYCRR 65-3.9 [d].)

The statutory and regulatory language therefore provides two points at which interest may start to accrue on a claim submitted by a medical services provider. If the provider commences a no-fault action within 30 days after the receipt of a denial of claim form, interest will start running on the date that the claim is overdue—30 days after the claim is presented to the defendant for payment until the claim is paid. (See LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co., 12 NY3d 217, 223 [2009]; Corona Hgts. Med., 32 Misc 3d at 9.) Where the defendant has not [*3]established the proper mailing of the denial of claim form, the claim is considered not to have been denied, payment of benefits is considered overdue, and interest on the claim will commence “30 days after the claim was presented to the defendant for payment” until the claim is paid. (Corona Hgts. Med., 32 Misc 3d at 10.) However, where the provider fails to commence the lawsuit within 30 days after receipt of the denial form, whether the denial is timely or not, interest is tolled until the commencement of the lawsuit. (LMK Psychological, 12 NY3d at 223.)

This court rules that either scenario falls within the scope of CCA 412. Professor David D. Siegel asserts that one of the major{**38 Misc 3d at 271} impetuses behind the promulgation of chapter 452 of the Laws of 2005, which amended sections 400 and 409 of the CCA to make commencement by filing applicable to the civil courts and added section 412, were abuses in the no-fault system. (See 164 Siegel’s Practice Review, Basic Change in Practice in Civil, District, and City Courts: “Filing” System Adopted; Summons Service No Longer Deemed “Commencement” at 1 [Aug. 2005]; 165 Siegel’s Practice Review, Reason for Insurance Law No-Fault Amendments Made as Part of Chapter 452 at 4 [Sept. 2005].) Under the old commencement by service system, no-fault providers would serve hundreds of summons and complaints without ever obtaining index numbers or filing the summons and proof of service in the clerk’s office. “This meant that the clerk’s office had nothing whatever in its files to indicate that the case was there,” and the civil court lost revenue by not collecting filing fees. (165 Siegel’s Practice Review, Calendar Crushing No-Fault Cases: Part of the Spur for Chapter 452 at 2 [Sept. 2005]; 165 Siegel’s Practice Review, Does “Bunching” of No-Fault Medical Claims Violate Rules About Permissive Joinder? at 3 [Sept. 2005].) Thus, under section 412, a medical service provider is entitled to interest only after “service is completed by the actual index number being properly depicted on the summons.” (165 Siegel’s Practice Review, The New § 412, on the Accrual of Interest at 1 [Sept. 2005].)

Professor Siegel also asserts that 11 NYCRR 65-3.9 served as the model for the legislature’s language in section 412 making the commencement of the action the point at which interest starts accruing. (165 Siegel’s Practice Review, The New § 412, on the Accrual of Interest at 1 [Sept. 2005].) The staff of the civil court, according to Siegel, “pinpointed the claim the legislature had in mind with the insertion . . . of § 412.” They found “an insurance department regulation . . . that makes the inception of the action the starting time of interest.” (Id.) The tolling provision contained in 11 NYCRR 65-3.9 (c) does not take no-fault actions outside the ambit of section 412. Section 412 merely requires that once the action is commenced by filing, the plaintiff must complete service by providing to the party charged with the payment of interest a summons with the actual index number being properly depicted upon it before interest can start accruing. This requirement merely ensures that the chaos and lack of notice which existed prior to the amendment of CCA 400 and 409 do not resurface.

Furthermore, the tenets of statutory construction mandate that the court review section 412 in light of the mischief sought{**38 Misc 3d at 272} to be remedied by the new legislation and to construe it in such a fashion as will suppress the evil and advance the remedy. (McKinney’s Cons Laws of NY, Book 1, Statutes § 95; see Matter of New York Life Ins. Co. v State Tax Commn., 80 AD2d 675 [3d Dept 1981].) Similarly, all parts of a statute are to be read and construed together in order to determine the legislative intent. Statutory words must be read in their context and words of a section should be interpreted with reference to the entire scheme. (Statutes § 97; see Matter of Jude F., 291 AD2d 165, 170 [2d Dept 2002].) [*4]

The “core objective” of the no-fault automobile insurance system was “to provide a tightly timed process of claim, disputation and payment.” (LMK Psychological Servs., P.C. at 222, citing Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 319 [2007].) Therefore, an insurer’s failure to pay or deny a claim within the requisite time period of 30 days “carries significant consequences, including the payment of attorneys’ fees and interest.” (LMK Psychological, 12 NY3d at 222.)

Plaintiffs are under a similar duty to proceed expeditiously. “[T]o do otherwise would reward a recalcitrant plaintiff with a windfall of punitive interest payments, and would contravene the legislative goal of promptly resolving no-fault claims.” (Arzu v NYC Tr. Auth., 35 Misc 3d 210, 212 [Civ Ct, Kings County 2012]; Devonshire Surgical Facility v American Tr. Ins. Co., 31 Misc 3d 1221[A], 2011 NY Slip Op 50793[U] [Civ Ct, NY County 2011].) The Superintendent of Insurance has interpreted the tolling of interest provision contained in subdivision (c) to apply, regardless of whether the particular denial at issue was untimely, so as to encourage applicants to swiftly seek to resolve any dispute (LMK Psychological Servs., 12 NY3d at 223-224; see also Canarsie Med. Health, P.C. v National Grange Mut. Ins. Co., 21 Misc 3d 791, 797 [Sup Ct, NY County 2008] [11 NYCRR 65-3.9 contains a “built-in protection against potential delay by providing that where an applicant chooses not to timely press forward to seek redress for a denial, there will be no interest penalty assessed against the insurer until such time as the applicant chooses a remedy. This is in keeping with the intent of the No-Fault Law as a whole because it seeks to encourage the parties moving forward toward a quick resolution, while not economically favoring one side or the other”]).

CCA 412’s mandate that interest commence accruing upon service similarly serves as an incentive for plaintiff to promptly{**38 Misc 3d at 273} pursue and resolve no-fault claims. It is to the plaintiff’s benefit to serve the summons and complaint as quickly as possible after filing the case in court so as to start accruing interest. These same goals are fulfilled by the tolling provision, which acts as an incentive for the provider to rapidly commence the lawsuit, even where it has failed to initiate the action within 30 days of receipt of the denial.

Since plaintiff waited over 30 days after it received a denial to initiate a no-fault action, interest shall commence accruing on the date that service of the summons and complaint was completed in accordance with CCA 412.

Footnotes

Footnote *: A number of other cases were submitted by the same parties on this exact issue. In all cases the defendant has conceded that plaintiff is entitled to judgment.

Civil Court of the City of New York, Richmond County

017113/11

Philip S. Straniere, J.

Your toe bone connected to your foot bone,

Your foot bone connected to your ankle bone,

Your ankle bone connected to your leg bone,

Your leg bone connected to your knee bone,

Your knee bone connected to your thigh bone,

Your thigh bone connected to your hip bone,

Your hip bone connected to your back bone,

Your back bone connected to your shoulder bone,

Your shoulder bone connected to your neck bone,

Your neck bone connected to your head bone,

I hear the word of the Lord!^[FN1] [*2]

Plaintiff, Willets Point Chiropractic, PC (Willets)assignee of Mirna Flores (Index No. 17113/11) and plaintiff, Richard Grosso, DC, PC (Grosso) assignee of Mirna Flores (Index # 17119/11) each commenced an action against Allstate Insurance Company seeking to be compensated for professional chiropractic services rendered to Mirna Flores in the form of “manipulation under anesthesia” (MUA) which was denied by defendant Allstate as neither medically nor chiropractically necessary.

It is stipulated that the plaintiffs timely and in proper form submitted their respective bills for service and that the defendant timely and in proper form denied their respective applications. Defendant’s denial was based on an independent chiropractic examination (ICE) report of Chester Bogdan DC (Bogdan), dated August 5, 2010, in which he concluded that no further chiropractic treatment was chiropractically necessary. The MUA services rendered herein were performed almost one year later, in July 2011.

A trial was commenced on June 13, 2012 and concluded on June 26, 2012. Both sides were represented by counsel. The parties had stipulated that both actions for chiropractic services rendered during the MUA could be joined together for trial as they involved common issues of law and fact. It was also conceded that neither side had information as to whether payment to the pre-screening physician, the anesthesiologist and facility involved in the MUA had been either made or denied by Allstate. Nor was there any evidence presented as to whether the plaintiffs commenced actions seeking payment for regular chiropractic services rendered to Flores after the August 2010 Bogdan report.

TREATMENT HISTORY:

The patient, Mirna Lopez-Flores was injured in an automobile accident on May 9, 2010. She did not go immediately to the hospital, but later that same day went to the emergency room at Winthrop Hospital where she was examined, X-rayed, had a CT scan and was released. She came under the care of Richard Grosso, DC, chiropractor, an orthopedist, Dov Berkowitz, MD and Eric Jacobson, MD, a specialist in Physical Medicine and Rehabilitation. She was initially receiving chiropractic treatment five times a week, which apparently was commenced on or about May 19, 2010 and which was later reduced to three times a week. In addition Flores was going to physical therapy three times a week.

At the time of the peer review on August 5, 2010, Flores was still receiving chiropractic treatment and physical therapy three times a week. Dr. Berkowitz had recommended her for three MRI exams.

On June 19, 2010, she underwent MRI’s of both her cervical and lumbar spine. The radiologist rendered an impression of “posterior disc herniations at L4-5 and at L5-S1 impinging on the anterior aspect of the spinal canal and abutting the nerve roots bilaterally.” The cervical MRI came back negative.

On June 22, 2010, Flores had an MRI of her right shoulder. The radiologist’s impression was “findings consistent with an intrasubstance tear of the subscapularis muscle. Subacromial-[*3]subdeltoid bursitis.”

On August 5, 2010, Bogdan, DC conducted an ICE of Flores and concluded that no further chiropractic treatment was required. In spite of the denial, Flores continued to receive chiropractic treatment. It is unclear whether these treatments were performed by plaintiff Grosso or by plaintiff Willets where Grosso is the chief executive officer according to the Department of State, Division of Corporations records, as the progress notes and “SOAP” notes don’t have any letterhead or its equivalent but appear to be signed or initialed by Grosso.

On July 16, July 23, and July 30, 2011 plaintiffs performed MUA’s on Flores at a facility at the New Horizon Surgical Center in Paterson, New Jersey. Each plaintiff billed defendant $1,641.92 for each of the three treatments and each seeks to be compensated in the sum of $4,925.76 for their services. It should be noted this does not include a fee from the facility, the pre-screening physician or the anesthesiologist.

Bogdan rendered his opinion after conducting his chiropractic examination but did so without being provided with any records from the treating chiropractor by the defendant. Bogdan indicated that he did not need the treating chiropractor’s notes in order to render his own opinion based on a chiropractic exam ^[FN2].

There was another issue raised in regard to Bogdan. He admittedly is not certified to perform MUA and therefore cannot give an opinion as to the necessity of that particular procedure. However, Allstate’s and Bogdan’s position is that he was opining only as to the need for further chiropractic service after August 2010 and did not have to deal with the issue of MUA because there was no need for any additional chiropractic services as Flores’ conditions had resolved and she had reached maximum benefit from her treatments, let alone her requiring the MUA performed almost one year later in July 2011. The court agrees that the threshold issue was extension of chiropractic treatment after the ICE date and that the MUA is being viewed as part of the overall chiropractic treatment Flores received. [*4]

Plaintiffs have several burdens in these cases. First, establishing that additional chiropractic services were needed after the date of Bogdan’s ICE. Second, that the injuries that necessitated the MUA were causally related to the automobile accident of May 2010. Third, that MUA is a recognized treatment for Flores’ injuries. The credible evidence is that the plaintiffs have not met their burden in those regards and have not successfully rebutted defendant’s decision to terminate treatment.

Issues Presented:

A. Are Chiropractors Permitted to Perform MUA?

Before addressing the above issues particular to these claims, it is necessary to determine if chiropractors may perform MUA. This court is concerned by the growing number of no-fault claims for MUA which seem to be proliferating over the last year or so in the court system. Several carriers refuse to recognize MUA as a compensable treatment option under no-fault or other health related insurance policies. In fact there is debate in the medical and chiropractic communities as to the effectiveness of MUA as a treatment.

In this vein, it should be noted that in all of the MUA trials presided over by this judge, no litigant has ever presented any independent study supporting the effectiveness or need for this treatment or establishing that the patient who received MUA had a condition which was made appreciably better after the MUA rather than if only conservative chiropractic treatment had been continued or some other modality employed.

Are there any studies showing what is the status of the patient six months or a year after MUA? None has been presented to this court. No one has answered the question whether the reason patients are not seen again by chiropractors after undergoing MUA is that insurance coverage has run out rather than they are better and no longer need treatment. And because the patients for whom MUA is recommended by definition do not tolerate “pain” well, is there any study examining whether they “feel” better and have “greater” range of motion because they think the procedure works rather than it actually did anything physically to them to ease their pain and increase mobility? It would seem that because pain is subjective and these patients are by definition not tolerant of pain, this would be something an independent academic or health care professional institution would have studied. But as noted above, no such independent studies have been presented to this court.

A quick on-line search disclosed that most of the “success” reports are self-serving statements from the persons who practice MUA and who recommend the treatment and not by unaffiliated peer review process. Is MUA an accepted medical/chiropractic procedure or is it “junk” medicine/chiropractic? This court is not convinced that this issue has been resolved so as to warrant the seemingly sky-rocketing use of this procedure in no-fault insurance situations.

Finally, MUA appears to be a procedure whereby a chiropractor who has been unsuccessful treating the patient with conservative treatment recommends that the patient [*5]undergo MUA to be performed by the same chiropractor. Rarely, if ever, is a second opinion obtained before this “surgical” procedure is undertaken.

There have been several published decisions in regard to MUA and an apparent acceptance that MUA is a recognized treatment option for chiropractic patients and subject to being compensated for under a no-fault insurance policy [Flatbush Chiropractic PC v Metlife Auto & Home, 35 Misc 3d 1023(A), (2012); Kraft v State Farm Mutual, 34 Misc 3d 376 (2011); Giugliano v Merchants Mutual, 29 Misc 3d 367 (2010)].

The common theme for approval of payment on these claims is that the Workers’ Compensation Fee Schedule allows it. No-fault insurance claims do not have there own fee schedules and health service providers are compensated under workers’ compensation codes [Insurance Law §5108]. As noted in Giugliano, the Workers’ Compensation Fee Schedule (WCFS) contains a category for “Anesthesia, Surgery, Radiology, Pathology & Laboratory, Medicine and Physical Medicine”-parenthetically all health related procedures which a chiropractor is not licensed to perform- as well as a separate “Chiropractic” fee schedule. The courts in those cases allowing compensation have reasoned because chiropractors by the statutory definition of their profession can perform “manipulations” they may perform “manipulations under anesthesia” [emphasis added] so long as the anesthesia is administered by an anesthesiologist or some other authorized medical professional. The protocol for MUA also has a requirement that a medical doctor examine the patient and approve of the procedure and that it be performed at a surgical center or its equivalent, thereby somehow further legitimatizing the chiropractic MUA.

The conclusions in these cases have been reached even though the chiropractors performing the MUA bill their services for the procedure under the WCFS as “surgery.” Routinely these bills are submitted with the designation for the procedures as being under CPT Code 22505 “manipulation of spine requiring anesthesia, any region.” In the current cases Code 27194 was also used by the plaintiffs. This code is used for closed fractures and is designated for the hip and pelvic area. It is described as “treatment of pelvic ring fracture, dislocation, diastasis or subluxation; with manipulation, requiring more than local anesthesia.” There is no equivalent CPT Code for chiropractic performance of MUA under the Chiropractic Schedule. Why this code was used by plaintiffs for an alleged shoulder injury is curious or else there was no apparent billing for the shoulder manipulations.

Rather than reaching the conclusion that chiropractors cannot do these procedures, some Workers’ Compensation Board judges and the court decisions which have addressed this issue, concluded that MUA was allowed because it was “manipulation,” which chiropractors can, by licensing, perform. These cases also refer to a State Education Department letter dated September 18, 2007 which allegedly concluded that the Education Law does not prohibit a chiropractor from performing MUA. None of these cases concluded that this letter permitted the practice only that it was not prohibited. Although neither side submitted a copy of this “letter,” the court was able to obtain one. And as Billy Flynn notes in the musical “Chicago” concerning the identity of [*6]“Mary Sunshine”, “things often aren’t what they seem.”

The letter in question is actually dated September 13, 2007 and not September 18, 2007. It is on letterhead from the State Board of Chiropractors and signed by the Executive Secretary. It is not addressed to anyone in particular but has the salutation “To Whom It May Concern” which in and of itself is a curious way to address a document which by its contents is apparently authorizing chiropractors to perform MUA a procedure not specifically granted in the licensing statute. It starts “I write in response to your inquiry regarding chiropractic manipulation under anesthesia” yet does not indicate who made the request.

Analysis of the contents of the letter discloses rather than an outright endorsement of chiropractic MUA it is more akin to the wedding scene in “Fiddler On The Roof” when Tevye asks the Rabbi if men and women are permitted to dance together.

Tevye:Well, Rabbi?

Rabbi:Dancing…Well it’s not exactly forbidden, but….

Tevye:There you see? It’s not forbidden.

At which point the men and women break “tradition” and begin dancing together leaving the question unresolved.

When the entire letter is read, it is clear that all it does is say that as written the Education Law does not prohibit MUA, it does not indicate that it is specifically permitted. There is no discussion of the issue of whether or not the procedure is “surgery” and whether chiropractors may perform surgery. In fact, the language of the letter emphasizes the word “may” in regard to MUA and then sets forth limiting parameters and caveats as to its use. It says:

While the practice act does not specifically prohibit a chiropractor from performing spinal manipulation on patients who are under anesthesia, this type of procedure may present special risks and a practitioner should carefully evaluate such use. Furthermore, the chiropractor is not authorized to order or administer anesthesia.

Every chiropractor licensed in New York State must be competent to perform any procedure that they provide by virtue of education or training. Also, the procedure must be warranted by the condition of the patient and, thus, does not constitute excessive treatment, which would be a violation of Part 29 of the Regents Rules on Unprofessional Conduct.

I would note that while it may be permissible in New York State for chiropractors to perform manipulations on patients under anesthesia, gaining hospital privileges and obtaining physicians willing to prescribe and administer anesthesia for this purpose must be addressed.

As pointed out later in this decision, there is nothing in the Education Law which permits the executive secretary to expand the statutory description of the areas of practice of a particular profession. The letter is neither an “opinion of counsel” nor does it indicate that the opinion is [*7]that of the State Board of Chiropractic.

Education Law §6551(1) defines the practice of chiropractic.

(A)s detecting and correcting by manual or mechanical means structural imbalance, distortion, or subluxations in the human body for the purpose of removing nerve interference and the effects thereof where such interference is the result of or related to distortion, misalignment or subluxation of or in the vertebral column.

Nothing in this section permits a chiropractor to conduct a surgical procedure ^[FN3] nor apparently, is “surgery” specifically prohibited to a chiropractor by Education Law §6551(3) other than a prohibition to treating “any surgical condition of the abdomen.” As difficult as it is to believe, there apparently is no New York statute defining “surgery.” Considering barbers at one time performed surgery, hence the red in a classic barber pole, you would think New York would want to define that term. Because it is undefined perhaps chiropractors have the same privilege as barbers.

Stedman’s Medical Dictionary, 27th Edition, defines “surgery” as “1. The branch of medicine concerned with the treatment of disease, injury, and deformity by physical operation or manipulation. 2. The performance or procedures of an operation.”

Stedman’s defines “medicine” as “2. The art of preventing or curing disease; the science concerned with disease in all its relations. 3. The study and treatment of general diseases or those affecting the internal parts of the body, especially those not usually requiring surgical intervention.”

Applying the Stedman’s definition of “surgery” to that of chiropractic in the Education Law, leads to the conclusion that chiropractors cannot practice surgery because they are not engaged in the practice of “medicine.” In New York chiropractic care is not considered “medicine” neither is a chiropractor a “physician.”Although chiropractors engage in “manipulation,” they do not treat “disease, injury or deformity.” Nor can they “operate” [Education Law §6551(3)]. The Education Law §6520 defines the “practice of medicine” as “diagnosing, treating, operating or prescribing for any human disease, pain, injury, deformity or physical condition.” Chiropractors are not permitted to do any of these things. Does MUA cross the line between “correcting” and “treating?”

It is clear then, that if MUA is a form of surgery, which the CPT Code labels it as such, chiropractors are prohibited from engaging in it. If MUA is not a form of surgery, then why is not it included under the Chiropractic CPT Code? [*8]

Can the court and the Workers’ Compensation Board judges rely on an Education Department letter as a basis for permitting this practice? A review of the Education Law does not disclose any authority for the Board of Regents to expand the practice of a profession beyond that set forth by the legislature in the statute. Education Law §6504 states:

Regulation of the professions.

Admission to the practice of the professions (licensing) and regulation of such practice shall be supervised by the board of regents…and administered by the education department, assisted by a state board for each profession….

Education Law §6506 gives the board of regents the authority to “supervise the admission to and the practice of the professions.” Education Law §6507 grants the authority to administer the admission and practice of the professions to the state education department and to promulgate regulations [Education Law §6507(2)(a)]. State boards for each profession are established by Education Law §6508 for the purpose of assisting the board of regents and the education department on “matters of licensing, practice and conduct.” The board may conduct and grade examinations, assist in other licensing matters [Education Law §6508(2)], and conduct disciplinary proceedings [Education Law§6508(3)].

When taken together it is apparent that these bodies are charged with regulating professions which include both medicine and chiropractic. But there is nothing in the statute that gives these entities the authority to expand the scope of a defined practice beyond that which the legislature has set forth. If the general consensus is that chiropractors should perform MUA then the statute should be changed to include MUA and not by a letter which does not even have the authority of an “opinion of counsel” or the imprimatur of the Board of Regents or the State Board of Chiropractic. As has been done in the past, when new treatment techniques and diagnostic tools have evolved the legislature has so acted. This is evidenced by the legislative history of the chiropractic statutes. It behooves the chiropractic profession to amend the statute because if chiropractors are performing MUA when they are not authorized to do so under the statute, it would be “professional misconduct” under Education Law §6509(2).

This issue of whether MUA is a surgical procedure and therefore the practice of medicine was recently litigated in Texas [Texas Board of Chiropractic Examiners v Texas Medical Association, ___SW3d___, 2012 WL 2742554, 7/16/12]. Unlike New York, Texas specifically defines a surgical procedure and prohibits chiropractors from engaging in surgical procedures [Texas Occupational Code §201.002 (a)(4) and §201.002( c)(1)]. In fact, the Texas statute in describing what is included in a “surgical procedure” refers to those “procedures included in the surgery section of the common procedures coding system as adopted by the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services.” The Texas Court of Appeals ruled MUA is in fact a surgical procedure under those codes and cannot be performed by chiropractors.

Presumably MUA in Texas is performed in the same manner as in New York, so how can it be “surgery” in Texas and not “surgery” in New York. Is there a difference merely because [*9]when no-fault MUA is performed in New York it is billed under Workers’ Compensation CPT schedules while Texas uses Medicare/Medicaid CPT schedules promulgated by the federal government? That would make sense if each state was describing two different procedures. The MUA procedure is the same so it cannot be more than one classification.

For instance if you are asked “What’s big, grey, weighs over a ton and has a trunk in front?” the answer can be either an elephant or a Volkswagen Beetle. But in that case the description fits two different things. If you throw in an engine, there is only one possible answer ^[FN4]. Here there is agreement as to what is meant by MUA. The question becomes whether it is really surgery. To allow MUA by chiropractors would mean that the entities that code MUA as “surgery” are wrong in their classification of the procedure and that it should be reclassified. If it is not “surgery” then why is it performed at “surgical centers?”

If MUA is surgery, then chiropractors cannot perform it because surgery can only be performed by practitioners of medicine and that does not include chiropractors. This is not to say that chiropractors do not have the skill and training to perform MUA, it is that there is a gap in the legislation that created the parameters of the chiropractic profession. It is the function of the legislature to correct the problem and not for the courts to expand the definition beyond the plain language of the statute.

B. Can chiropractors manipulate parts of the body other than the vertebral column?

Assuming that chiropractors are permitted to perform MUA, to what extent can they manipulate parts of the body other than the vertebral column? This court has been confronted with claims by chiropractors for manipulation of not only the spine but of other parts of the body.

In this case, according to the three procedure reports the plaintiffs prepared, they performed MUA on the cervical spine, the thoracic spine, the lumbopelvic spine(which included some hip manipulation) and the shoulders of Flores. The cases that have approved these extra-spinal manipulations have focused on the language in the Education Law describing chiropractic as able to treat “structural imbalance, distortion or subluxations in the human body” as permitting such treatments. The problem with this interpretation is that it ignores the plain language of the rest of the statute that the purpose must be the “removing of nerve interference and the effects thereof where such interference is the result of or related to distortion, misalignment or subluxation of or in the vertebral column.”

Taking the broadest interpretation of this statute, which some courts apparently have done, then a chiropractor could conceivably treat all of the parts of the body in “Dem Bones” because nerves reach each of them and those nerves are connected to the spine. So a chiropractor could manipulate the toes because the nerves in those appendages hurt? [*10]

However, the language of the statute makes it clear that the treatment has to arise from a “distortion, misalignment or subluxation of or in the vertebral column” and not a problem in another area of the body not generated from the spine. The problem must originate in the spinal column and not vice versa. A strict reading of the statute permits the chiropractor to manipulate the spinal column to relieve pain in another area of the body. They cannot by the statute manipulate the other area to relieve the pain in that area. Again we are back at the difference between “treatment” and “correction.” If this is something chiropractors are trained to do, then the statute has to be changed.

In the no-fault setting this means that the non-spinal area which is being treated must not only have “nerve interference” but that nerve interference must be related to the automobile accident. The plaintiff herein, as have other chiropractors, testified that the manipulation is necessary to break down fibrous adhesions and scar tissue which the patient developed. The cases supporting the procedure cite a Workers’ Compensation Board case [Aramak, 2009 WL 456874 (NY Work. Comp. Bd)] as permitting chiropractors to perform these procedures [See also Solomon Schechter Day School , 2006 WL 3889159 (NY Work. Comp. Bd.]. Aramak rested its conclusion on the representation that the chiropractor was only going to perform manipulation to break-up fibrous adhesions and scar tissue formed around the spine and not in other areas of the body, so its applicability to more extensive manipulation must be questioned.

These holdings are interesting in view of the fact that they appear to be an expansion of chiropractic care beyond the words of the governing regulations concerning Workers’ Compensation claims.

Limitations of chiropractic treatment.

(a) When care is required for a compensable injury, an injured employee may select to treat him or her any duly registered and licensed chiropractor authorized by the chair to render chiropractic care only if said injury consists solely of a condition which may lawfully be treated by a chiropractor as defined in section 6551 of the Education Law. If the injury does not consist of a condition which may lawfully be treated by a chiropractor or consists of multiple conditions, any one of which is outside the limits prescribed by the Education Law for chiropractic treatment, the chiropractor may not initially treat such employee for any condition but must so advise the injured employee and instruct him or her to consult a physician of the employee’s choice for appropriate care and treatment. Such physician shall supervise the treatment of said condition, including the future treatment to be administered to the patient by the chiropractor. [12 NYCRR §346.1].

Based on this regulation to be an authorized treatment for Workers’ Compensation purposes, the plaintiff would have to establish that the patient’s condition can only be treated by a chiropractor and that the MUA was the appropriate treatment. Although this is a no-fault case, the compensation is made pursuant to the Workers’ Compensation CPT Code. As there is neither a chiropractic nor a separate no-fault code for MUA, and payment is made under the Workers’ Compensation code, then the standard to be applied to authorize treatment must be the same as in Workers’ Compensation. The plaintiffs have not shown that the patient’s injury could not and [*11]should not have been treated by a physician such as an orthopedist or neurologist, or to a lesser degree by a physical therapist rather than by MUA.

But again, this interpretation gets back to the same problem, what exactly does the Education Law §6551 permit a chiropractor to do.

A review of the treatment records and the testimony, establish that there is an utter failure to prove that the condition Flores complained of was related to the motor vehicle accident. Flores’ complaints were of pain in the lower back, neck and right shoulder. There was no complaint concerning the thoracic area of her spine, yet plaintiff felt the need to perform MUA in that area. There was no MRI done of the thoracic spine. The MRI of the cervical spine showed no injury whatsoever, in fact, it was a “normal examination,” so what was the need for MUA of either the cervical or thoracic area?

The patient’s complaint in regard to her shoulder was only of injury to her “right” shoulder. So why was it necessary to perform MUA on both shoulders? In fact, the MRI which was taken of the right shoulder only and it revealed “an intrasubstance tear of the subscapularis muscle” and “subacromial-subdeltoid bursitis.” Plaintiff cannot explain how MUA is the proper treatment for a tear of a shoulder muscle and bursitis and where a chiropractor has the authority to treat an injury of that nature. It is unclear under which billing code the MUA of the shoulder was submitted to the defendant as it was not listed on plaintiffs’ claim forms. There is nothing in the record, nor did plaintiff’s trial testimony, show how manipulation of the spine or of the shoulders would relieve nerve interference in the vertebral column affecting the shoulders.

The MRI of the lumbosacral spine revealed “posterior disc herniations at L4-5 and at L5-S1 impinging on the anterior aspect of the spinal canal and abutting the nerve roots bilaterally.” When the court questioned the plaintiff as to the appropriateness of performing MUA on someone with disc herniations, the witness responded there is no danger if you know what you are doing. He produced no accepted professional studies that supported his conclusion. In fact, if the Education Department letter stands for anything, it warns chiropractors not to be undertaking MUA if there is some inherent risk to the patient beyond regular chiropractic manipulation.

Also, there is no indication that the plaintiffs ever received a copy of any of the MRI reports as they are addressed to Dr. Berkowitz with a copy to Dr. Jacobson, both medical doctors. Did the plaintiffs even have a copy of the reports when they did the MUA’s? There is a question as to whether the plaintiffs as chiropractors are trained or permitted to read MRI’s and diagnostic tests other than X-rays. The Education Law §6551 only discusses X-rays in regard to chiropractors and their training. Does New York permit chiropractors to be certified to read MRI’s and other more modern diagnostic tools? The plaintiffs are licenced in New Jersey and performed the MUA there where the New Jersey statute does recognize that chiropractor’s use other diagnostic tests besides X-rays. If the plaintiffs did not receive the actual MRI’s to view even if they got copies of the reports, how could they seriously consider performing the MUA on a patient with a disc herniation? And if they did have the actual MRI’s they have to establish they [*12]have the training to read the MRI’s,

Again, this is not to say that the plaintiffs and other chiropractors are not qualified to perform MUA assuming that is a recognized treatment, it is that New York does not currently allow them to do it.

Finally, plaintiff has failed to explain why it billed defendant using CPT Code 27194 which is for closed fractures in the hip and pelvic area and performed MUA in that area when there is no record of any complaint or injury in that area by the patient.

Based on the MRI and other reports, it is difficult to conclude exactly what are the “structural imbalance, distortion and subluxations” that Flores suffered from that the plaintiffs sought to correct by the MUA?

This position of the plaintiffs that the MUA was safe may have been acceptable if the plaintiff had any proof that a physician had examined the patient and approved the MUA procedure for her. No such report was presented at trial nor do the records submitted by the plaintiff even reveal the name of that physician. None of the three procedure reports prepared by the plaintiffs disclose the clearing physician’s name. In fact the MUA report for the third day of procedure, July 30, 2011 lacks even the name of the anesthesiologist.

Also, missing from the plaintiff’s submissions is a consent form signed by the patient. As this is a “surgical” procedure requiring the use of anesthesia, it would seem that such a document is required. Because the MUA was performed on three different dates each a week apart, an argument could be made that a consent form was needed for each procedure.

Pubic Health Law §2805-d provides:

Limitations of medical, dental or podiatric malpractice action based on lack of informed consent

1. Lack of informed consent means the failure of the person providing professionaltreatment or diagnosis to disclose to the patient such alternatives thereto and the reasonably foreseeable risks and benefits involved as a reasonable medical, dental or podiatric practitioner under similar circumstances would have disclosed, in a manner permitting the patient to make a knowledgeable evaluation.

2. The right of action to recover for medical, dental or podiatric malpractice based on lack of informed consent is limited to those cases involving either (a) non-emergency treatment, procedure or surgery, or (b) a diagnostic procedure which involved invasion or disruption of the integrity of the body.

Although the case at bar is not a malpractice action, the language of the statute may be helpful in resolving the issue of how to treat chiropractic MUA. As is obvious from the statute, chiropractors are not specifically mentioned. Does this mean that they are not required to obtain [*13]an “informed consent” from a patient? After all Education Law §6551 does not use the terms “treatment or diagnosis” in describing chiropractic. These terms are reserved for the practice of medicine (Education Law §6521). Or is this another situation where “medical” malpractice is being given an interpretation beyond the language of the Education Law and is being used to refer to all health treatment by professionals other than those performed by dentists and podiatrists?

If it is concluded that chiropractors are not subject to obtaining informed consent from a patient, then can it also be concluded that they cannot perform “surgery” because informed consent is required for non-emergency surgery under the Public Health Law and MUA is considered a non-emergency surgical procedure under the Workers’ Compensation codes.

In addition to all of the problems analyzed above, plaintiff failed to explain how the accident caused scar tissue or fibrous adhesions to develop which required the MUA and that the patient’s complaints were not related to her general physical condition ( 40 years old, 5’3″ and 163 lbs.) or her job (medical assistant). If not related to the accident than some other source other than the no-fault carrier should pay for the services.

Plaintiff testified that Flores met the criteria for MUA established by the National Academy of Manipulation Under Anesthesia Physicians and went through the eight listed items a practitioner of MUA should check before recommending MUA to a patient. Plaintiff testified that Flores met the first seven criteria. The plaintiff indicated that the National Academy also set forth eight diagnoses that are “responsive to MUA” and that Flores met four of the eight criteria. A skeptic might ask if a patient had been unresponsive to chiropractic care for the extended period that this patient underwent-over one year of chiropractic treatment, why would you conclude that more aggressive chiropractic care was needed rather than determining some other treatment should be undertaken or that the patient had in fact achieved the maximum benefit?

Interestingly, the criteria relied upon by the plaintiff are issued by the “National Academy of Manipulation Under Anesthesia Physicians” (emphasis added). As pointed out above in New York chiropractors are not considered physicians. Stedman’s Medical Dictionary defines a physician as someone who practices medicine. So the very entity which is establishing guidelines for MUA by definition excludes chiropractors in New York. The clear implication is that MUA is to be performed by physicians and not chiropractors unless physician has some other connotation.

The facts of this case trigger another line of inquiry to be addressed. The MUA’s were performed in New Jersey. The first question to be asked would be could a licensed New York chiropractor perform MUA in New Jersey? It would seem that to perform any chiropractic services in New Jersey, like most professions, the chiropractor would have to be licensed there. Plaintiff’s submitted copies of their New Jersey registration certificates indicating that they are permitted to perform MUA in New Jersey. It also appears that the definition of chiropractic services in New Jersey is much broader than that in New York. In fact, in New Jersey [*14]chiropractors can have the title “chiropractic physician.” However, they are not included in the definition of the practice of medicine and surgery [NJSA 45:9-5.1]. Neither side provided any information as to whether MUA would qualify as “surgery” in New Jersey. It does appear that chiropractors in New Jersey may be permitted to perform surgery such as MUA under a different statue.

The New Jersey statute provides: “No licensed chiropractor shall…perform surgery as requires cutting by instruments or laser excepting adjustment of the articulations of the spinal column or extremities”[NJSA 45:9-14.5(b)]. The definition of chiropractic in that statutory section specifically includes manipulation of the soft tissue of the body, as well as the spine and other joints so, presumably MUA would be a permitted practice in New Jersey. This definition is far more liberal than that of the New York statute. In fact case law in New Jersey holds that whether a chiropractor can do adjustments beyond the spinal area mus be addressed in a case by case basis [Bedford v Riello, 195 NJ 210 (2008)].

Unfortunately, for the plaintiffs, the claim arose from an accident in New York, the patient resides in New York and the claim is filed under the New York State Insurance Law. So the New York definitions as to the scope of the services that a chiropractor may provide and not the law of the situs of the service determines whether the plaintiffs are entitled to payment for the MUA. This is not the place to continue the debate from “Gypsy” as to whether New York is the center of the world as asserted by Miss Cratchitt or New York is the center of New York as Mama Rose alleges.

It must be concluded that as the New York statute is written, chiropractors cannot treat areas of the body outside of the spinal column unless there is a direct link between the pain in that area and a problem which manipulation of the spinal column can alleviate. Plaintiffs have failed to establish that Flores’ treatment by an MUA was related to the automobile accident.

C. “This is another fine mess you’ve gotten me into.”

Without the assistance of Stan Laurel, no-fault insurance in New York is clearly in need of reform. Since the Civil Court began tracking these cases in 2006, the number of cases brought in New York City has exceeded 200,000 or about 25% of the court’s case load. It does appear that the number of filings has declined in 2011 & 2012 to less than 200,000 cases. The court must wonder what is in the economic structure of this system where health care providers are willing to not be paid for services they previously rendered to a patient and then to have to litigate the issue in the hope that some percentage of the claims will be settled or paid after prevailing at a trial. And again the court is only seeing the claims that result in litigation. It excludes claims that are not pursued at all or wind up in arbitration. Is the reimbursement rate for no-fault so high when compared to other insurance payments that it is economically feasible to absorb so many unpaid claims? It must be questioned why highly trained professionals are so willing to work for free. [*15]

On the other hand, why would the insurance industry continue to want to have a system in place which is litigation generating with all its attendant expenses by its very nature? The cost of trying cases must be less than paying the claims or else they would be seeking to remedy the system.

In no-fault land carriers assert the “Goldilocks Rule” in regard to diagnostic testing. Health care providers are only paid if the test is not performed “too early” or “too late” but “just right.” Also where else but in no-fault land do you get to have two attorneys trying cases-with doctors as witnesses- where the amount in controversy is less than the cheap seats at Yankee Stadium?

Ironically, no-fault uses the workers’ compensation fee schedule to pay health care providers. Yet, by statute, workers’ compensation requires pre-approval of all non-emergency treatments something that for some unknown reason is missing from the no-fault law [Workers’ Compensation Law Article 2; 12 NYCRR §325-1.4]. Actually there is nothing in the no-fault law which precludes obtaining pre-approval before rendering non-emergency treatment so why not require it by contract? Unless of course the terms of the entire no-fault contract is generated by the State Insurance Department and because those regulations do not include pre-approval it is barred.

Also, worthy of comparison is the language of Education Law §6731 covering physical therapists. It limits treatments by a physical therapist to ten visits or thirty days if the treatments were “without referral from a physician, dentist, podiatrist, nurse practitioner or licensed midwife….”[Education Law §6731(d)]. Absent from the list are chiropractors. No similar treatment restriction is found in regard to treatment by chiropractors in Education Law Article 132.

Adoption of either of these standards to no-fault insurance claims would reduce the amount of this litigation.

Part of the problem apparently is the inability of the legislature to consistently apply the language of its own statutes. Under the Education Law Article 131, only physicians practice “medicine” and only medical doctors may be referred to as a “physician.” Chiropractors do not practice medicine and are not physicians. The fact that the legislature does not adhere to its own statutes is obvious when the no fault law is read [Insurance Law Article 51]. Insurance Law §5102 defines “basic economic loss” under the no-fault law as

(1) All necessary medical expenses incurred for:(i) medical, hospital(…)surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; (ii) psychiatric, physical therapy(provided that treatment is rendered pursuant to a referral) and occupational therapy and rehabilitation; (iii) non-medical remedial care and treatment in accordance with a religious method of healing recognized by the laws of this state; and (iv) any other professional health services; all without limitation as to time provided within one year after the date of the accident causing the injury if it is ascertainable that [*16]further expenses may be incurred as a result of the injury.

A reading of the above section would lead to the conclusion that chiropractors are not covered by the no-fault statute as they are the only health service provider governed by Education Law, Title VIII, the “Professions” other than veterinarians and mid-wives not mentioned in the Insurance Law. The only way to include chiropractors is to say that they are covered in the”any other professional health services” of the statute. Considering all the other licensed professions are mentioned specifically and chiropractors have been licensed in New York from a time before the no-fault law was enacted, what the legislature intended must be questioned. Early cases interpreting the no-fault statutes held that if the language of the statute was followed, chiropractic services were not covered. Other courts held that the broadest definition of “medical” should be applied and that it obviously included chiropractors. This of course is a complete rewriting of the law defining medicine by the courts.

It should also be noted that chiropractors are not specifically mentioned in the Workers’ Compensation Law §13 as persons who could provide treatment to an injured worker and a separate section was added to include chiropractors [WCL §13-l].

It is clear that almost all of the current no-fault litigation in the court system could be eliminated by requiring “pre-approval” of all non-emergency care. Such a procedure would eliminate legitimate health care providers having to work for free when a claim is denied and would allow insurance carriers to investigate fraudulent claims beforehand and not after the fact.

MUA is the “icing on the cake,” “cherry on top,” or “gold ring on the merry-go-round” of the irrationality of the current no-fault system. MUA has the potentiality of generating five different lawsuits; one from each of the two chiropractors involved; one from the anesthesiologist; one from the pre-screening physician and one from the facility. Each suit could be brought in a separate county in New York City because the jurisdiction of the Civil Court is citywide and insurance carriers cannot claim they are not present in a particular county as they do business in them all. This situation would potentially result in five different rulings, or at a minimum two different ones such as the screening facility gets paid and the chiropractors do not.

Where else but in no-fault land can you have the situation where the chiropractor testifying is the same person who determined the corrections he has been giving are not working so that he can recommend a more aggressive treatment-requiring anesthesia and a surgical setting, to be performed by him, and who after it is done proclaims it a success. In no-fault land the patient who received the services never testifies. The court is only presented with the self-serving recommendation for the MUA and the self-serving conclusion that it was successful.

It would seem that the carrier would seek permissive joinder of these claims under CPLR §1002 as in theory, it is in the best position to know if it is being sued in different jurisdictions in regard to claims arising from the same occurrence or at a minimum should have the ability to check its own records to obtain that information. Why carriers apparently refuse to do so cannot [*17]be explained.

D. Did plaintiffs prove their prima facie case?

Where a plaintiff provider, as here, proves that completed claims forms have been submitted to the defendant carrier setting forth the fact and the amount of the services provided and the loss sustained, and that payment of the no-fault benefits are overdue, the provider establishes a prima facie case of medical necessity [West Tremont Medical Diagnostic, PC. V Geico Insurance Co., 13 Misc 3d 131(A), (2006)]. However, “[w]here the defendant insurer presents sufficient evidence to establish a defense based on a lack of medical necessity, the burden shifts to the plaintiff which must then present its own evidence of medical necessity” [id., citing Prince Richardson on Evidence §§3-104. 3-202 (Farrell 11th ed.); see also Delta Diagnostic Radiology, PC v American Transit Insurance Co., 2007 Slip Op. 52455(U)].

The court found defendant’s expert, Bogdan, to be a credible witness. The witness’ testimony sufficiently demonstrated that the treatment at issue was not chiropractically necessary. This shifted the burden back to the plaintiff to show that the treatments were chiropractically necessary. Although Grosso testified, the court concludes that his testimony was insufficient to establish that any chiropractic treatment, let alone MUA, of Flores was necessary after the services were terminated by defendant after receipt of Bogdan’s ICE report.

The cause of action of each plaintiff therefore must be dismissed.

Conclusion:

For all of the reasons above, plaintiffs causes of action in both cases are dismissed. Chiropractors are prohibited from performing MUA in New York. In addition, plaintiffs failed to establish that the patient’s injuries were causally related to the motor vehicle accident and that a physician screened the patient before the MUA was performed. Plaintiffs failed to establish that the MUA was chiropractically necessary.

Even if the court were to determine that MUA was chiropractically necessary the plaintiffs are not permitted to collect the full CPT Code rate they are restricted to 68.4% of the relative value unit allowable for medical doctors [New York State Workers’ Compensation Board Office of General Counsel letter August 14, 2009; see also Flatbush Chiropractic, PC v Metlife Auto & Home, 35 Misc 3d 1203(A) 2012].

Again this is not to say that properly trained chiropractors should not be prohibited from performing MUA. It is the function of the legislature to expand the definition of the chiropractic profession and not the court system.

Exhibits, if any, will be available at the office of the clerk of the court thirty days after receipt of a copy of this decision. [*18]

The foregoing constitutes the decision and order of the court.

Dated: August 16, 2012_________________________

Staten Island, NYHon. Philip S. Straniere

Judge, Civil Court

Footnotes

Footnote 1: One of the versions of “Dem Bones” also known as “Dry Bones” or “Dem Dry Bones” an often recorded folk song attributed to James Weldon Johnson.

Footnote 2: Also for some reason Bogdan “affirmed” his report and did not have it notarized. CPLR §2106 sets forth who can affirm documents rather than having to locate a notary and chiropractors are not on that list. This makes Bogdan’s independent chiropractic evaluation inadmissible in this action. The question of whether an insurance carrier such as Allstate can rely on the report to terminate services is not addressed in the CPLR as it applies only to reports being used for a “pending” action and no action was pending when the report was prepared. Absent a section of the Insurance Law or an Insurance Department regulation requiring a carrier to have an affirmation/affidavit in order to deny coverage, it is apparent that Allstate could use the improperly affirmed report to terminate chiropractic services. Neither side presented any law on this question. Allstate avoided the issue at trial by having Bogdan testify and be subject to cross-examination on what records he reviewed and the extent of the ICE.

Footnote 3: Ironically, there does not appear to be a definition in any New York statute or administrative rule as to what constitutes surgery. Apparently New York believes that it does not know exactly how to define surgery but knows what it is when it sees it.

Footnote 4: An elephant on a motorcycle is not an acceptable alternative response.

Civil Court of the City of New York, Kings County

046391/10

A P P E A R A N C E S :

ATTORNEYS FOR PLAINTIFF:

Gary Tsirelman, P.C.

65 Jay Street, Third Floor

Brooklyn, NY 11201

ATTORNEYS FOR DEFENDANT:

Iseman, Cunningham, Riester & Hyde, LLP

2649 South Road, Suite 230

Poughkeepsie, New York 12601

Katherine A. Levine, J.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion

PapersNumbered

Notice of Motion and Affidavits Annexed………….. …………………………1

Notice of Cross-Motion and Affidavits Annexed.. ………………………….

Answering Affidavits………………………………………………………………….. .2

Replying Affidavit of defendant…………………………………………………….3

Exhibits………………………………………………………………………………………..

Other: ………………………………………………………………………………………….

Upon the foregoing cited papers, the Decision/Order on this Motion is as follows:

This case presents raises a new twist to previous rulings that the notification requirements for verification requests, as contained in 11 NYCRR §§65-3.5 and 3.6, do not apply to examinations under oath (“EUOs”) that are scheduled prior to the insurance company’s receipt of claim forms (“pre claim EUO”).

Defendant Hartford Insurance Co. (“defendant” or “Hartford”) seeks summary judgment [*2]based upon the assignor’s failure to appear at both a pre-claim EUO, which was adjourned on consent, and an EUO noticed and scheduled subsequent to defendant’s receipt of the claim which, under precedent, triggers strict regulatory time deadlines for compliance with verification requests. Plaintiff Lender Medical Supply, Inc. (“plaintiff” or “Lender”) opposes defendant’s motion on the grounds that since the first scheduled EUO was adjourned on consent, defendant had to request that the assignor appear for two other EUOs, pursuant to 11 NYCRR §65-3.6(b), before it could deny the claim, which it failed to do.

Lender provided medical equipment to its assignor on September 18, 2009. Hartford, by letter dated October 9, 2009, scheduled the assignor for an EUO to be held on November 10, 2009. On October 23, 2009, after it had sent the EUO request but prior to the scheduled date of the EUO, Hartford received the claim from plaintiff. Defendant granted the assignor’s request for an adjournment by letter dated November 10, 2009 and rescheduled the assignor’s EUO for November 17, 2009. After the assignor failed to appear at the rescheduled EUO, the defendant issued a denial dated December 8, 2009 based upon the assignor’s failure to appear for both EUOs.

As a condition to coverage under the revised Personal Injury Endorsement (“PIP”), “the eligible person …shall…as may reasonably be required submit to examinations under oath by any person named by the [insurer] and subscribe the same[11 NYCRR §65 – 1.1(d) [Sec. I. Conditions, Proof of Claim (b)]. Another condition to coverage under this section sets forth that an eligible person shall submit to medical examination by physicians selected by or acceptable to the insurer as often as the insurer may reasonably require.”

11 NYCRR §65-3.5 details the verification procedures to be followed after the insurer receives the completed application for no fault benefits (NYS form N-F2). The insurance regulations provide for EUOs and IMEs as part of an insurer’s “entitlement to additional verification” following receipt of a provider’s statutory claim forms. Stephen Fogel Psychological v. Progressive Casualty Ins. Co., 7 Misc 3d 18, 19 (App. Term. 2d Dept. 2004), aff’d in pert part 35 AD3d 720 (2d Dept. 2006). See also, All-Boro Medical Supplies, Inc. v Progressive Ins. Co., 20 Misc 3d 554 (Civil Ct., Kings Co,. 2008); Lumbermen’s Mutual Casualty Company v. Inwood Hill Medical P.C., et al, 2005 NY Slip Op 51101(U), 8 Misc 3d 1014(A) (Sup. Ct., NY Co. 2005). An insurer may toll the 30 day period it has in which to deny a claim by properly requesting verification within 15 days from the receipt of the proof of claim form or bill (11 NYCRR §65.3.5). See, Psych. & Massage Therapy Assoc., PLLC v. Progressive Casualty Ins. Co., 5 Misc 3d 723 (Civ Ct. Queens Co., 2004).

Where an EUO is requested as additional verification after receipt of the claim, the insurer must schedule an EUO within a reasonable time frame and as “expeditiously as possible.” Eagle Surgical Supply, Inc. v. Progressive Cas. Ins. Co., 21 Misc 3d 49, 51 (App. Term, 2d Dept. 2008). See Bayside Rehab. & Physical Therapy P.C. v. GEICO, 24 Misc 3d 542, 546 (Civil Ct., Richmond Co. 2009). If the “requested verification has not been supplied to the insurer 30 calendar days after the original receipt, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested., either by a telephone call or [*3]by mail. 11 NYCRR § 65-3.6(b). “A claim need not be paid or denied until all demanded verification is provided.” New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 569, 570 (2d Dept. 2004). See, Insurance Law § 5106(a); 11 NYCRR §§65-3.5(c), 65-3.8(a)(1).

Failure to submit a timely follow up request will void the tolling provisions of the time in which to submit a denial and will preclude a defendant from asserting the defense based on failure to produce requested verification, including failure to appear for a post-claim EUO. See, All-Boro Medical Supplies supra at 557; Kings Medical Supply Inc. v. Kemper Auto & Home Ins. Co., 2005 NY Slip Op 51450(U), 7 Misc 3d 128(A) (App. Term, 2 & 11th Dist. 2005). Therefore, in order for an insurer to predicate its denial based upon an assignor’s failure to appear for a post-claim EUO, it must prove that it sent both an original and follow up request and that the injured party failed to appear for both scheduled EUOs. See, Advanced Medical, P.C. v. Utica Mutual Ins. Co., 2009 NY Slip Op 51023(U), 23 Misc 3d 141(A) (App. Term, 2d Dept. 2009).

The detailed and narrowly construed verification procedures contained in 11 NYCRR 65-1.1(d) and 65-3.5(d) governing EUOs that are requested after receipt of a claim do not apply to EUO demands prior to the submission of a claim form. See Stephen Fogel Psychological, P.C. v. Progressive Ins. Co., 7 Misc 3d 18, 21 (App. Term, 2nd Dept. 2004). The right to an EUO prior to an insurer’s receipt of the claim is “not afforded by the verification procedures and timetables,” but rather by the mandatory personal injury protection, “which is independent of the verification procedures.” Id at 21. Furthermore, these detailed verification procedures are “not amenable to application at a stage prior to the submission of a claim form.” Id, at 21. See, Prime Psychological Services, P.C. (Ortiz) v. Nationwide Property and Cas. Ins. Co., 24 Misc 3d 230 (Civil Ct., Richmond Co. 2009) (an insurer not required to send EUO requests to the provider’s attorney for a pre claim EUO); Bayside Rehab., supra, an insurer need not notify the assignee medical services provider of pre claim IME cut off notice).

Therefore, an insurer is not obligated to send out a follow up request after an assignor failed to appears for a pre-claim EUO.^[FN1] Prime Psychological Services (Horne) v ELRAC, 2009 NY Slip Op 52579(U), 25 Misc 3d 1244(A) (Civil Ct., Richmond Co. 2009). It can properly deny the claim, retroactive to the date of loss, for the assignor’s failure to attend the one pre-claim scheduled IME so long as it mails the denial within 30 days of its receipt of the claim. Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 35 AD3d 720, 722 (2d Dept. 2006); Amaze Medical Supply, Inc., 2006 NY Slip Op 50909(U), 12 Misc 3d 127(A) (App. Term, 2d Dept. 2006); Prime Psychological (Horne), supra; All-Boro, supra. [*4]

Here, defendant cannot deny the claim based upon the assignor’s failure to attend the EUO that was scheduled prior to defendant’s receipt of the claim. By letter dated November 10, 2009 defendant’s attorney confirmed that at the request of the assignor’s attorney, the EUO was adjourned and that Hartford would provide his client with one final opportunity to appear for an EUO on November 17, 2009. Defendant’s consent to the adjournment vitiated its right to count the assignor’s failure to appear at the EUO as a no show. See Vitality Chiropractic, P.C..v . Kemper, 14 Misc 3d 94 (App. Term, 2d Dept. 2006)(mutually agreed upon rescheduling of initial IME is not equivalent of failure to supply requested verification.)

Furthermore, once defendant received the claim from the plaintiff, it was required to adhere to statutory and regulatory scheme of verification for the processing of no-fault claims. All-Boro Medical Supplies, supra, 20 Misc 3d at 556-557. Thus, defendant was required to send a follow-up request for an EUO pursuant to 11 NYCRR §65-3.6(b), once the assignor failed to appear for the scheduled November 17th date. Having failed to issue a follow up request, defendant could not assert, as a matter of law, the assignor’s failure to appear for the EUO as its basis to deny the claim. See, All- Boro, supra at 557.

Accordingly, defendant’s motion for summary judgment is denied and the case is to proceed to trial.

The foregoing shall constitute the Decision and Order of the Court.

Dated: May 01, 2012___________________________

Katherine A. LevineJudge, Civil Court

Footnotes

Footnote 1:Insurer could have properly denied plaintiff’s claim upon plaintiff’s failure to show up for a pre-claim EUO as a violation of a condition precedent to coverage. See Neomy Medical, P.C. v. American Transit Ins. Co., 2011 NY Slip Op 50536(U), 31 Misc 3d 1208(A)(Civ. Ct., 2011).

Civil Court of the City of New York, Kings County

CV 076337/09

Sara Pankowski, Esq.

Attorney for Plaintiff

Gary Tsirelman, PC

65 Jay Street

3rd Floor

Brooklyn NY 11201

718-438-1200

Morgan MacKay, Esq.

Attorney for Defendant

Law Offices of Teresa M. Spina

170 Froehlich Farm Blvd.

Woodbury NY 11797

516-496-5822

Reginald A. Boddie, J.

In this action, plaintiff seeks to recover assigned first-party no-fault benefits for psychological services alleged to have been provided to the subject assignor. Plaintiff seeks reimbursement for an initial interview in the amount of $194.58, evaluation of records in the amount of $67.24, five hours of psychological testing in the amount of $696.50, and explanation and interpretation of results in the amount of $103.31 (plaintiff’s bill). Plaintiff was paid for the initial interview. The remainder of the services were denied as medically unnecessary (defendant’s NF-10).

The case was tried on December 8, 2010. At trial, plaintiff and defendant stipulated in writing to plaintiff’s prima facie case, defendant’s timely denial, admission of the expert witness disclosure package, which included the peer review report and medical records reviewed, and that the only issue for trial was lack of medical necessity.

Plaintiff rested, relying on the stipulation that it had established its prima facie case. [*2]Defendant’s witness was unavailable and defendant moved to adjourn the trial to a later date to call a witness. Since defendant failed to show good cause, the application to adjourn was denied. (NY City Civ Ct Act § 1302 [a]). Plaintiff then moved for a directed verdict on the ground that defendant was not ready to proceed and could not establish its defense (CPLR 4401). Defendant opposed plaintiff’s motion and cross-moved for a judgment in its favor, relying on the stipulation that it established timely and proper denials, and that the peer review report and medical records were in evidence. The court reserved decision and the parties submitted post-trial briefs on January 2, 2012 and January 12, 2012. After consideration of the evidence and the parties’ arguments, the court denies plaintiff’s motion and grants judgment to the defendant for the reasons indicated herein.

Under New York no-fault law, plaintiff must establish its prima facie case by demonstrating submission to the defendant of a claim form, proof of the fact and amount of the loss sustained, and proof either that the defendant failed to pay or deny the claim within the requisite 30-day period, or that the defendant issued a timely denial that was conclusory, vague or without merit as a matter of law (see Insurance Law § 5106 [a]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]; Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A], 2011 NY Slip Op 51292[U] [App Term, 2d, 11th & 13th Jud Dists 2011]). Here, plaintiff did not offer any evidence establishing that the denial was untimely, conclusory, vague or without merit as a matter of law. Nevertheless, as a consequence of the parties’ prima facie stipulation, the burden shifted to defendant to prove the timeliness of its denial and the defense stated therein (Amaze Med. Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 2004 NY Slip Op 24527 [App Term, 2d & 11th Jud Dists 2004]). However, because the parties also stipulated that defendant timely denied the bills, the only issue for trial was lack of medical necessity.

Defendant “bears both the burden of production and persuasion” as to its defense of lack of medical necessity (Nir v Allstate Ins. Co., 7 Misc 3d 544 [Civ Ct, Kings County 2005],citing King’s Med. Supply Inc. v Country-Wide Ins. Co., 5 Misc 3d 767, 771 [Civ Ct, Kings County 2004]); and the sole evidence presented here by defendant is the peer report and medical records which were stipulated into evidence.

To meet its burden of proof at trial on the defense of lack of medical necessity, at a minimum, defendant must establish a factual basis and medical rationale for the lack of medical necessity for the services for which reimbursement is sought (Nir, 7 Misc 3d at 546-547, [citations omitted]). To establish the factual basis, the defense must be supported by sufficient factual evidence or proof and cannot be conclusory (Nir at 547, citing Inwood Hill Med. v Allstate Ins. Co., 3 Misc 3d 1110[A], 2004 Slip Op 50565[U] [Civ Ct, New York County 2004]). A peer review report may be found to have insufficient factual basis “…if it fails to provide specifics of the claim, is conclusory, or otherwise lacks a basis in the facts of the claim” (Nir at 547, citing Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 2004 NY Slip Op 24119 [App Term, 2d Dept 2004]).

Furthermore, the medical rationale referenced in a peer review report must be within the [*3]generally accepted medical or professional practice. “Generally accepted practice is that range of practice that the profession will follow in the diagnosis and treatment of patients in light of the standards and values that define its calling” (Nir at 547, citing Citywide Social Work & Psychological Serv. PLLC v Travelers Indem. Co., 3 Misc 3d 608, 616 [Civ Ct, Kings County 2004]). A peer review report may be found insufficient when unsupported or controverted by evidence of “generally accepted medical/professional practice” (id.). However, where plaintiff rebuts the defendant’s evidence with its own demonstrating that the medical services were consistent with generally accepted medical practice, the defendant’s peer report may be accorded less weight, and the court may find that defendant failed to meet its burden (Nir at 547, citing see Elm Med. P.C. v Am. Home Assur. Co., 2003 NY Slip Op 51357[U] [Civ Ct, Kings County 2003]).

As a preliminary matter, the court notes that the peer review report of Michael H. Rosenfeld, Psy.D. was electronically signed and not notarized (see Rogy Medical, P.C. v Mercury Cas. Co., 23 Misc 3d 132[A], 2009 NY Slip Op 50732[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Radiology Today, P.C. v Geico Ins. Co., 20 Misc 3d 70, 71-72 [App Term, 2d & 11th Jud Dists 2008]; CPLR 2106). Despite this omission, the court is compelled to consider the report as direct evidence of defendant’s defense since the document was admitted pursuant to the parties’ stipulation; and a court may not cast aside an open-court stipulation absent proof it was entered into by “fraud, collusion, mistake, accident or other such ground” (Matinzi v Joy, 60 NY2d 835, 836 [1983]; In re Frutiger’s Estate, 29 NY2d 143 [1971]; Gage v Jay Bee Photographer, Inc.,222 AD2d 648, 649 [2d Dept 1995]). Here, no such proof was alleged or demonstrated.

The subject assignor, a thirty-seven year old female, was involved in a motor vehicle accident on January 8, 2008, and was alleged to have suffered head, neck and lower back pain, and gone home after the accident (Narrative Report at 2). The psychologist allegedly interviewed the assignor and gave her a mental status examination along with a series of self- administered checklist tests, including a Beck Depression Inventory (BDI), a Beck Hopelessness Scale (BHS), Beck Anxiety Inventory (BAI), Neuropsychological Symptom (NSC), Patient Pain Profile (P-3), and Posttraumatic Stress Diagnostic Scale (PDS) (id. at 4).

The peer review doctor, Michael H. Rosenfeld, Psy.D., a New York State Licensed Psychologist, whose report and resume were admitted into evidence, stated that he reviewed the patient’s records concerning the services provided by John R. Braun, Ph.D., as well as the reports and recommendations related thereto. In the report, he indicated:

Claimant is a 37-year-old female who alleges she was involved in a motor vehicle accident on January 8, 2008 and was evaluated by John R. Braun, Ph.D. from All Boro Psychological Services, P.C. from January 16, 2008 to January 23, 2008. The claimant received a diagnostic interview, a review of medical records, five hours of psychological testing and an explanation of results (Peer Report at 1). Claimant was the driver of a vehicle involved in a motor vehicle accident on 1/08/08 reportedly resulting in head, neck and lower back pain. There was no loss of consciousness, fractures or lacerations (id. at 2). “…[T]he initial subjective complaints included: increased general nervousness, fear of driving or riding in cars, nightmares, headaches, [*4]dizziness, irritability, etc.” (id.).

Dr. Rosenfeld stated, “Given the complaints, the initial intake was appropriate, the psychological testing was excessive, clinically unnecessary, and deviates from accepted standard practice in psychology” (id. at 2). Citing psychological reference material, Dr. Rosenfeld explained, such tests “should not be used routinely, but to address specific questions, the answer to which may alter the patient’s treatment.” He then set forth three basic criteria which, when met, establish the necessity of psychological testing within the profession, as follows:

1. The reason for testing must be based on a specific referral question or questions from the treating provider and related directly to the psychiatric or psychological treatment of the patient

2. The specific referral question or questions cannot be answered by means of diagnostic interview

3. The specific referral question or questions and testing results will have a meaningful impact on the rendering of a diagnosis and the course or outcome of treatment (id.)

He stated, in this case, none of the criteria were met and elaborated on the reasons why the administration of these tests was inappropriate; namely, that the testing would not alter the diagnosis or treatment of the patient in any meaningful way. He also stated review of the records is normally part of the initial interview and the explanation was unnecessary since the tests were not warranted (id. at 3).

Accordingly, the court finds that Dr. Rosenfeld’s peer review report sets forth a sufficient factual basis and medical rationale for the lack of medical necessity asserted in the denial. The court notes plaintiff has failed to rebut defendant’s evidence with its own testimonial or other documentary evidence (see Innovative Chiropractic, P.C. v Mercury Ins. Co., 25 Misc 3d 137[A], 2009 NY Slip Op 5232[U][App Term, 2d, 11th & 13th Jud Dists 2009], citing see Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495 [App Term, 2d, 11th & 13th Jud Dists 2009]). Additionally, the court acknowledges there are circumstances where a live witness would be required to embellish defendant’s position. However, on these facts, the court finds defendant was not required to present an expert witness to provide live testimony at trial, particularly since plaintiff did not offer a witness or any evidence whatsoever on rebuttal.

Therefore, the plaintiff’s motion for a directed verdict is denied. Defendant is granted a judgment in its favor, and the complaint is dismissed with prejudice.

This constitutes the Decision and Order of the court.

Dated: January 31, 2012

Brooklyn, NY

_______________________

Hon. Reginald A. Boddie

Judge, Civil Court [*5]

Civil Court of the City of New York, Kings County

CV 061389/09

Sara Pankowski, Esq.

Attorney for Plaintiff

Gary Tsirelman, PC

65 Jay Street

3rd Floor

Brooklyn NY 11201

718-438-1200

Morgan MacKay, Esq.

Attorney for Defendant

Law Offices of Teresa M. Spina

170 Froehlich Farm Blvd.

Woodbury NY 11797

516-496-5822

Reginald A. Boddie, J.

In this action, plaintiff seeks to recover assigned first-party no-fault benefits for psychological services alleged to have been provided to the subject assignor. Plaintiff seeks reimbursement for an initial interview in the amount of $194.58, evaluation of records in the amount of $67.24, five hours of psychological testing in the amount of $696.50, and explanation and interpretation of results in the amount of $103.31 (plaintiff’s bill). Plaintiff was paid for the initial interview. The remainder of the services were denied as medically unnecessary and for fees not in accordance with the fee schedules (defendant’s NF-10). [*2]

The case was tried on December 8, 2010. At trial, plaintiff and defendant stipulated in writing to plaintiff’s prima facie case, defendant’s timely denials, admission of the expert witness disclosure package, which included the peer review report and medical records reviewed, and that the only issues for trial were lack of medical necessity and fees not in accordance with fee schedules.

Plaintiff rested, relying on the stipulation that it had established its prima facie case. Defendant’s witness was unavailable, and defendant moved to adjourn the trial to a later date to call a witness. Since defendant failed to show good cause, the application to adjourn was denied (NY City Civ Ct Act § 1302 [a]). Plaintiff then moved for a directed verdict on the ground that defendant was not ready to proceed and could not establish its defenses (CPLR 4401). Relying on the stipulation, defendant opposed plaintiff’s motion and cross-moved for a judgment in its favor on the ground that it established timely and proper denials, and that the peer review report and medical records were in evidence. The court reserved decision and the parties submitted post-trial briefs on January 2, 2012 and January 12, 2012. After consideration of the evidence and the parties’ arguments, plaintiff’s motion for a directed verdict is denied. Defendant’s motion for judgment is granted in part and denied in part for the reasons stated herein.

Under New York no-fault law, plaintiff must establish its prima facie case by demonstrating submission to the defendant of a claim form, proof of the fact and amount of the loss sustained, and proof either that the defendant failed to pay or deny the claim within the requisite 30-day period, or that the defendant issued a timely denial that was conclusory, vague or without merit as a matter of law (see Insurance Law § 5106 [a]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]; Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A], 2011 NY Slip Op 51292[U] [App Term, 2d, 11th & 13th Jud Dists 2011]).

Here, plaintiff did not demonstrate the denial was untimely, conclusory, vague or without merit as a matter of law. Nevertheless, as a consequence of the parties’ prima facie stipulation, the burden shifted to defendant to prove the timeliness of its denials and the defenses stated therein (Amaze Med. Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 2004 NY Slip Op 24527 [App Term, 2d & 11th Jud Dists 2004]). Because the parties also stipulated that defendant timely denied the bills, the only issues for trial were lack of medical necessity and fees not in accordance with fee schedules.

Defendant “bears both the burden of production and persuasion” as to its defenses (Nir v Allstate Ins. Co., 7 Misc 3d 544 [Civ Ct, Kings County 2005],citing King’s Med. Supply Inc. v Country-Wide Ins. Co., 5 Misc 3d 767, 771 [Civ Ct, Kings County 2004]). To meet its burden of proof at trial on the defense of lack of medical necessity, at a minimum, defendant must establish a factual basis and medical rationale for the lack of medical necessity for the services for which reimbursement is sought (Nir, 7 Misc 3d at 546-547, [citations omitted]).

To establish the factual basis, the defense must be supported by sufficient factual evidence or proof and cannot be conclusory (Nir at 547, citing Inwood Hill Med. v Allstate Ins. Co., 3 Misc 3d 1110[A], 2004 Slip Op 50565[U] [Civ Ct, New York County 2004]). A peer [*3]review report may be found to have insufficient factual basis “…if it fails to provide specifics of the claim, is conclusory, or otherwise lacks a basis in the facts of the claim” (Nir at 547, citing Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 2004 NY Slip Op 24119 [App Term, 2d Dept 2004]).

Further, the medical rationale referenced in a peer review report must be within the generally accepted medical or professional practice. “Generally accepted practice is that range of practice that the profession will follow in the diagnosis and treatment of patients in light of the standards and values that define its calling” (Nir at 547, citing Citywide Social Work & Psychological Serv. PLLC v Travelers Indem. Co., 3 Misc 3d 608, 616 [Civ Ct, Kings County 2004]). A peer review report may be found insufficient when unsupported or controverted by evidence of “generally accepted medical/professional practice” (id.). However, where plaintiff rebuts the defendant’s evidence with its own demonstrating that the medical services were consistent with generally accepted medical practice, the defendant’s peer report may be accorded less weight, and the court may find that defendant failed to meet its burden (Nir at 547, citing see Elm Med. P.C. v Am. Home Assur. Co., 2003 NY Slip Op 51357[U] [Civ Ct, Kings County 2003]).

In support of its defense of lack of medical necessity, defendant proffered the peer review report of Michael H. Rosenfeld, Psy.D., a New York State Licensed Psychologist, whose report and resume were stipulated into evidence. As a preliminary matter, the court notes that the peer review report of Dr. Rosenfeld was signed and notarized on November 14, 2007, one day after the date stamped on the denial. Despite this fact, the court is compelled to consider the report as direct evidence of defendant’s defense since a court may not cast aside an open-court stipulation, as here, absent proof it was entered into by “fraud, collusion, mistake, accident or other such ground” (Matinzi v Joy, 60 NY2d 835, 836 [1983]; In re Frutiger’s Estate, 29 NY2d 143 [1971]; Gage v Jay Bee Photographer, Inc.,222 AD2d 648, 649 [2d Dept 1995]). Here, no such proof was alleged or demonstrated.

Dr. Rosenfeld stated that he reviewed the patient’s records concerning the services provided by John R. Braun, Ph.D., the treating psychologist, as well as the reports and recommendations related thereto, and found the services allegedly provided not medically necessary. The assignor was a fifty-seven year old female, involved in a motor vehicle accident on May 18, 2007, and allegedly suffered head, neck, lower back, and bilateral knee pain (Narrative Report at 2). The court notes, Dr. Rosenfeld’s peer report incorrectly lists bilateral shoulder pain among the alleged injuries and omits the head and bilateral knee pain (Peer Review Report at 2).

Dr. Rosenfeld further stated, “[t]he claimant received a diagnostic interview, a review of medical records, five hours of psychological testing and an explanation of results” (id. at 1). Claimant went to Long Island College Hospital after the accident (id. at 2). ” There was no loss of consciousness, head trauma, fractures, or lacerations” (id.). “The initial subjective complaints included: increased general nervousness, fear of driving or riding in cars, nightmares, headaches, dizziness, sleep disturbance, feeling weak and fatigued, etc.” (id.). [*4]

Dr. Braun treated claimant from August 3, 2007 to August 10, 2007 (id. at 1). He performed a mental status examination and gave claimant a series of self-administered checklist tests, including the Beck Depression Inventory (BDI), Beck Hopelessness Scale (BHS), Beck Anxiety Inventory (BAI), Neuro-Psychological Symptom Checklist (NSC), Patient Pain Profile (P-3), and Posttraumatic Stress Diagnostic Scale (PDS) (Narrative Report at 4). The doctor billed for a diagnostic interview, a review of medical records, five hours of psychological testing and an explanation of results (plaintiff’s bill).

Dr. Rosenfeld stated, “Given the complaints, the initial intake was appropriate, however, the psychological testing was excessive, unnecessary, and deviates from accepted standard practice in psychology” (Peer Review Report at 2). He reasoned that the standard practice in psychology for establishing a diagnosis and developing a treatment plan is to conduct a thorough diagnostic interview and mental status examination of the patient. He stated, “Psychological testing is never considered necessary unless there are subtle or complex issues to investigate and the diagnosis cannot be determined based upon the clinical interview/mental status examination alone (i.e., testing could be necessary to rule out mental retardation, to rule out psychosis, to rule out a mild head injury, etc.).” (Id.)

Dr. Rosenfeld further stated this case was straightforward and without subtle or complex issues to investigate; the diagnosis and treatment plan should have been based on the interview and mental status examination alone; and the psychological testing was unnecessary and inconsistent with acceptable standards of psychological practice (id.). He indicated that the review of the records was medically unnecessary because it is normally part of the initial interview, and the explanation and interpretation of results was medically unnecessary since the tests were not warranted (id. at 3).

Plaintiff failed to rebut defendant’s evidence with testimonial or other documentary evidence (see Innovative Chiropractic, P.C. v Mercury Ins. Co., 25 Misc 3d 137[A], 2009 NY Slip Op 5232[U][App Term, 2d, 11th & 13th Jud Dists 2009], citing see Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495 [App Term, 2d, 11th & 13th Jud Dists 2009]). The court acknowledges there are circumstances where a live witness would be required to embellish defendant’s position. Here, the court finds defendant was not required to present an expert witness to testify at trial, particularly since plaintiff did not offer a witness or any evidence whatsoever on rebuttal. Accordingly, the court finds defendant successfully proved lack of medical necessity for four of the tests administered and the related explanation and interpretation of results.

The court limits the relief awarded because Dr. Rosenfeld’s report only meaningfully referred to and discussed four tests allegedly administered to the assignor, the BAI, BHS, BDI and PDS (see Nir, 7 Misc 3d at 548, citing Amaze, 3 Misc 3d 43). The peer review report did not discuss the NSC or P-3. Accordingly, the court finds Dr. Rosenfeld’s peer review report sets forth a sufficient factual basis and medical rationale for the lack of medical necessity of four of the six psychological services allegedly provided, the review of records, and the explanation and interpretation of results. The court finds defendant failed to meet its burden of establishing its defense of lack of medical necessity for the NSC and P-3 tests, and the relevant explanation and [*5]interpretation of results.

Finally, as to defendant’s defense of fees not in accordance with fee schedules, it was the “defendant’s burden to come forward with competent evidentiary proof’ supporting its fee schedule defenses” (Robert Physical Therapy v State Farm Mut. Auto. Ins. Co., 13 Misc 3d 172, 175 [Civ Ct, Kings County 2006] [citations omitted]). Defendant had the burden to “…proffer sufficient evidence to establish as a matter of law that the amounts charged in said claims were in excess of the amounts permitted by the fee schedule” (Rogy Med. P.C. v Mercury Cas. Co., 23 Misc 3d 132[A]; 2009 NY Slip Op 50732[U] [App Term, 2d, 11th & 13th Jud Dists 2009], [citations omitted]).

Here, defendant proffered no testimonial or documentary evidence to prove its fee schedule defense. Therefore, defendant’s fee schedule defense fails. Nevertheless, defendant proved lack of medical necessity for all but two of the services billed. Accordingly, a partial judgment is granted to plaintiff in the amount of $266.61, plus statutory interest from the date of filing, costs, and attorney’s fees. The balance of the claim is dismissed with prejudice.

This constitutes the Decision and Order of the court.

Dated:January 31, 2012 ______________________Hon. Reginald A. Boddie

Judge, Civil Court

[*1]

Civil Court of the City of New York, New York County, January 17, 2012

APPEARANCES OF COUNSEL

Leon Kucherovsky, New York City (Matthew Viverito of counsel), for plaintiff. Short & Billy P.C., New York City (Mark Puleo of counsel), for defendant.

{**35 Misc 3d at 583} OPINION OF THE COURT

Andrea Masley, J.

Plaintiff Stephen Matrangolo, D.C., P.C., a chiropractic practice, commenced this action in June 2007 for the recovery of no-fault benefits for services rendered to assignors Tina Espinozo-Hernandez and Edgar Hernandez for injuries arising from a car accident in December of 2006. The answer dated August 17, 2007 consists of six affirmative defenses including: (2) plaintiff lacks standing; (4) services provided by an independent contractor; and (6) the referral was an improper self-referral. After trial on June 9, 2011, the court reserved decision and the parties were directed to submit posttrial memoranda on issues raised but not resolved at trial.^[FN*] [*2]

{**35 Misc 3d at 584}For the following reasons, the court finds that Public Health Law § 238-a does not apply to the electromuscular testing provided here and thus is not a bar to Dr. Matrangolo’s claim. However, based on the testimony and evidence before it, the court finds that Dr. Matrangolo is not entitled to compensation for services provided by Dr. Brawner.

The parties stipulated at trial to all 11 outstanding health insurance claim forms for electromuscular testing services rendered in the amount of $2,168.82 for Ms. Espinozo-Hernandez and $2,807.64 for Mr. Hernandez. All services for assignor Tina Espinozo-Hernandez were rendered on December 11, 18, and 27 of 2006. For assignor Edgar Hernandez, services were rendered on December 18 and 27 of 2006, and on January 3 and 8 of 2007. Maria Ingrassia, Dr. Matrangolo’s medical biller, the sole witness, testified for plaintiff that Baldwin Medical referred the assignors to Dr. Matrangolo for neuromuscular testing, and that bills for plaintiff’s services were timely submitted and remain unpaid. Defendant stipulated to plaintiff’s prima facie case and asserted, as affirmative defenses, that the referral to Dr. Matrangolo constitutes a violation of Public Health Law § 238-a and that plaintiff lacks standing since it is billing for services provided by a nonparty physician. Plaintiff argued that defendant has failed to rebut its prima facie case and that Public Health Law § 238-a applies to physicians but not to chiropractors such as himself.

Defendant sought to introduce a lease between plaintiff and Baldwin Medical over objection from plaintiff. Defendant sought sanctions for plaintiff’s noncompliance with its May 13, 2011 subpoena ad testificandum and duces tecum of Dr. Matrangolo which seeks the patient file for each AAO; the leases between Dr. Matrangolo and the referring provider for 2006, 2007 and 2008; records of payments made by Dr. Matrangolo to the referring provider; all correspondence between Dr. Matrangolo and the referring provider; all W-2s or 1099s issued by Dr. Matrangolo to the technician who administered the tests in 2006, 2007 and 2008; and all documents regarding the financial relationship between plaintiff and the referring provider.

On cross-examination, Ms. Ingrassia identified Dr. Matrangolo’s signature on the lease and defendant offered it into evidence as an admission against interest. Had plaintiff responded{**35 Misc 3d at 585} to defendant’s trial subpoena, defendant could have offered the lease as a business record. However, by refusing to comply and not moving for relief from the subpoena, plaintiff robbed defendant of the opportunity to establish the requisite foundation. (CPLR 4518.) The lease had been identified by plaintiff in response to interrogatories which had been court ordered. Alternatively, defendant asked the court to make an adverse inference against plaintiff based on plaintiff’s failure to respond to the trial subpoena and allow the lease into evidence.

The witness also identified Dr. Brawner as a doctor who is associated with Baldwin Medical but who is not an employee of Dr. Matrangolo.

Defendant read plaintiff’s responses to interrogatories, as to the electromuscular testing of the AAOs, into the record. As to who administered the test to the AAOs, plaintiff responded Dr. Josephine Brawner. In response to the question how many people do the testing for Dr. Matrangolo, plaintiff responded Dr. Brawner. At trial, plaintiff objected to the interrogatories as evidence because plaintiff’s counsel explained that Dr. Matrangolo made a mistake when he responded to the interrogatories; an employee not Dr. Brawner administered the tests here. The [*3]court struck plaintiff’s counsel’s testimony. The court rejects all of plaintiff’s attempts to change plaintiff’s discovery responses in its posttrial brief. Plaintiff did not supplement its discovery or issue a correction. The time for testimony and evidence was at trial.

Exhibit A in evidence is a lease between Baldwin Medical Services P.C. and Dr. Stephen Matrangolo Corporation from January 1, 2007 to December 31, 2008. This lease was introduced at trial by defendant over plaintiff’s objection. Plaintiff produced this lease in discovery. Indeed, plaintiff annexed the lease to plaintiff’s posttrial memorandum as evidence of its compliance with discovery. Accordingly, there is no reason to believe the lease is not trustworthy. Plaintiff’s objection to admission of the lease is curious since the existence of a valid lease in effect from January 1, 2007 establishes a safe harbor for plaintiff for those services rendered in 2007. However, having failed to produce in discovery or at trial a lease for 2006, plaintiff would not be entitled to the protection of Public Health Law § 238-a (5) (b) (i). Therefore, if Public Health Law § 238-a applied to plaintiff, then he would be entitled to reimbursement only for those services rendered after January 1, 2007. Accordingly, it is unnecessary to otherwise address the subpoena issues.{**35 Misc 3d at 586}

In its posttrial memorandum, defendant argues that Dr. Matrangolo rents space from the referring provider Dr. Brawner for purposes of rendering services for which he is referred, and that this relationship in and of itself constitutes an improper referral under Public Health Law § 238-a. The absence of a lease for the 2006 calendar year, according to defendant, constitutes evidence of an improper referral. Lastly, defendant argues that plaintiff lacks standing since he billed for services rendered by Dr. Brawner, a nonparty physician.

Public Health Law § 238-a prohibits a practitioner from making a referral for services to a provider when the practitioner or an immediate family member of such practitioner has a “financial relationship” with the provider. (Stephen Matrangalo, DC, P.C. v Allstate Ins. Co., 31 Misc 3d 129[A], 2011 NY Slip Op 50517[U] [App Term, 1st Dept 2011].) A financial relationship is defined in Public Health Law § 238 (3) as “an ownership interest, investment interest or compensation arrangement.” A compensation arrangement is defined as “any remuneration between a practitioner . . . and a health care provider.” (Public Health Law § 238-a [5] [a].) The statute is clear that compensation does not include payments for the rental or lease of office space if there is a written agreement signed by the parties, for a rental term of at least one year, consistent with fair market value in an amount that does not vary with “volume or value of any referrals of business between the parties.” (Public Health Law § 238-a [5] [b] [i] [A].)

A plain reading of the statute supports plaintiff’s interpretation that, as a chiropractor, his services fall outside the ambit of Public Health Law § 238-a. Public Health Law § 238-a provides:

“1. (a) A practitioner authorized to order clinical laboratory services, pharmacy services, radiation therapy services, physical therapy services or x-ray or{**35 Misc 3d at 587} imaging services may not make a referral for such services to a health care provider authorized to provide such services where such practitioner or immediate family member of such practitioner has a financial relationship with such health care provider.

“(b) A health care provider or a referring practitioner may not present or cause to be presented to any individual or third party payor or other entity a claim, bill, or other demand for payment for clinical laboratory services, pharmacy services, radiation therapy services, physical [*4]therapy services or x-ray or imaging services furnished pursuant to a referral prohibited by this subdivision.

“2. Subdivision one of this section shall not apply in any of the following cases:

“(a) practitioners’ services—in the case of practitioners’ services provided personally by, or under the supervision of, another practitioner in the same group practice as the referring practitioner;

“(b) in-office ancillary services—in the case of health or health related items or services (i) that are furnished personally by the referring practitioner, personally by a practitioner who is a member of the same group practice as the referring practitioner, or personally by individuals who are employed by such practitioner or group practice and who are supervised by the practitioner or by another practitioner in the group practice; and in a building in which the referring practitioner, or another practitioner who is a member of the same group practice, furnishes practitioners’ services unrelated to the furnishing of such items or services, or in the case of a referring practitioner who is a member of a group practice, in another building which is used by the group practice for the centralized provision of such items or services of the group; and (ii) that are billed by the practitioner performing or supervising the services, by a group practice of which such practitioner is a member, or by an entity that is wholly owned by such practitioner or such group practice.” (Emphasis added.)

Public Health Law § 238 (11) defines “Practitioner” as “a licensed or registered physician, dentist, podiatrist, chiropractor, nurse, midwife, physician assistant or specialist assistant, physical therapist, or optometrist.” (Emphasis added.)

Public Health Law § 238 defines each of the five enumerated “services”:

“1. ‘Clinical laboratory services’ shall mean the microbiological, serological, chemical, hematological, biophysical, cytological or pathological examination of materials derived from the human body, for the purposes of obtaining information for the diagnosis, prevention, or treatment of disease or the assessment of health condition . . .{**35 Misc 3d at 588}

“13. ‘X-ray or imaging services’ shall mean diagnostic imaging techniques which shall include but not be limited to the following:

“(a) Conventional x-ray or radiology.

“(b) Fluoroscopy.

“(c) Digital radiography.

“(d) Computed tomography.

“(e) Magnetic resonance imaging.

“(f) Nuclear imaging.

“(g) Ultrasonography.

“(h) Angiography.

“14. ‘Pharmacy services’ shall mean the preparing, compounding, preserving or, the dispensing of drugs, medicines and therapeutic devices on the basis of prescriptions or other legal authority.

“15. ‘Radiation therapy services’ shall mean the use of high energy x-rays, particles, or radiation materials for the treatment of cancer and other diseases.

“16. ‘Physical therapy services’ means physical therapy as defined by section sixty-seven [*5]hundred thirty-one of the education law.”

According to Education Law § 6731, “Physical therapy” is defined as

“a. The evaluation, treatment or prevention of disability, injury, disease, or other condition of health using physical, chemical, and mechanical means including, but not limited to heat, cold, light, air, water, sound, electricity, massage, mobilization, and therapeutic exercise with or without assistive devices, and the performance and interpretation of tests and measurements to assess pathophysiological, pathomechanical, and developmental deficits of human systems to determine treatment, and assist in diagnosis and prognosis.

“b. The use of roentgen rays or radium, or the use of electricity for surgical purposes such as cauterization shall not be included in the practice of physical therapy.” (Emphasis added.)

The service at issue here is “electromuscular testing,” which is not an enumerated service in Public Health Law § 238-a. Education Law § 6551 defines the practice of “chiropractic” as:

“1. The practice of the profession of chiropractic is defined as detecting and correcting by manual or mechanical means structural imbalance, distortion,{**35 Misc 3d at 589} or subluxations in the human body for the purpose of removing nerve interference and the effects thereof, where such interference is the result of or related to distortion, misalignment or subluxation of or in the vertebral column.

“2. a. A license to practice as a chiropractor shall not permit the holder thereof to use radio-therapy, fluoroscopy, or any form of ionizing radiation except X-ray which shall be used for the detection of structural imbalance, distortion, or subluxations in the human body.

“b. The requirements and limitations with respect to the use of X-ray by chiropractors shall be enforced by the state commissioner of health and he is authorized to promulgate rules and regulations after conferring with the board to carry out the purposes of this subdivision.

“c. Chiropractors shall retain for a period of three years all X-ray films taken in the course of their practice, together with the records pertaining thereto, and shall make such films and records available to the state commissioner of health or his representative on demand.

“3. A license to practice chiropractic shall not permit the holder thereof to treat for any infectious diseases such as pneumonia, any communicable diseases listed in the sanitary code of the state of New York, any of the cardio-vascular-renal or cardio-pulmonary diseases, any surgical condition of the abdomen such as acute appendicitis, or diabetes, or any benign or malignant neoplasms; to operate; to reduce fractures or dislocations; to prescribe, administer, dispense or use in his practice drugs or medicines; or to use diagnostic or therapeutic methods involving chemical or biological means except diagnostic services performed by clinical laboratories which services shall be approved by the board as appropriate to the practice of chiropractic; or to utilize electrical devices except those devices approved by the board as being appropriate to the practice of chiropractic. Nothing herein shall be construed to prohibit a licensed chiropractor who has successfully completed a registered doctoral program in chiropractic, which contains courses of study in nutrition satisfactory to the department, from using nutritional counseling,{**35 Misc 3d at 590} [*6]including the dispensing of food concentrates, food extracts, vitamins, minerals, and other nutritional supplements approved by the board as being appropriate to, and as a part of, his or her practice of chiropractic. Nothing herein shall be construed to prohibit an individual who is not subject to regulation in this state as a licensed chiropractor from engaging in nutritional counseling.” (Emphasis added.)

Not one of the enumerated “services” includes neuromuscular electrical testing or chiropractic services. The statute clearly bars Dr. Matrangolo as a “practitioner” from making a referral to a family member or entity in which he has a financial interest, but it does not bar a practitioner, such as Dr. Brawner, from referring a patient to Dr. Matrangolo for chiropractic services or testing that falls within the scope of chiropracty because chiropracty is not one of the five enumerated services in Public Health Law § 238-a.

“Public Health Law § 238-a has an obvious and salutary purpose: to prevent the provision of health care from being based on financial incentive rather than patient welfare and medical necessity.” (Matrangolo, as Assignee of David Fitzhugh v Progressive Cas. Ins. Co., Civ Ct, NY County, Dec. 1, 2010, index No. 52599/09.) It is clear from the legislative history that the legislature was concerned about physician investors making self-referrals to clinical laboratories, imaging services and physical therapy. (Mem of Assemblyman Richard N. Gottfried, 1992 NY Legis Ann, at 513; Governor’s Mem approving L 1992, ch 803, 1992 NY Legis Ann, at 515.) Pharmacies were added in 1993. (Governor’s Program Bill Mem approving L 1993, ch 443, 1993 NY Legis Ann, at 321.) Whether to include “chiropracty” or “electromuscular” testing as an enumerated service in Public Health Law § 238-a is a decision to be made by the legislature. Although the Public Health Law is not a bar to plaintiff’s claims, Dr. Matrangolo is not entitled to payment because the evidence before the court is that Dr. Brawner, not Dr. Matrangolo, provided the services. (A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 9 Misc 3d 36 [App Term, 2d Dept 2005].) In the claim forms in evidence, plaintiff states that the tests were administered by Dr. Brawner.

Accordingly, it is ordered, that the case is dismissed with prejudice.

Footnotes

Footnote *: The purpose of the posttrial memoranda was to provide the parties an opportunity to explain the legal basis for arguments made during trial; not for the submission of additional testimony or evidence. Accordingly, the court rejects Dr. Matrangolo’s affidavit. The time for his testimony was at trial in response to defendant’s subpoena. Likewise, the court rejects defendant’s submission of examinations before trial of Dr. Matrangolo taken in other cases (e.g. June 5, 2008 transcript, without an index number, states that it was taken by order of Justice Lebedeff in Queens County Civil Court where the as assignee of [AAO] is Ashak Akram; and March 12, 2007, in 116 different matters for which the index numbers are not listed).

Civil Court of the City of New York, Bronx County

045155/08

Plaintiff represented by:

David Streiner, Esq.

Law Offices of Melissa Betancourt PC

Defendant represented by:

John DeOliveira, Esq.

Law Offices of Teresa M. Spina

Jose A. Padilla Jr., J.

The issue raised in this no-fault action for first party benefits concerns the admissibility of identifiable confidential medical records in a public civil judicial proceeding where no HIPAA authorization or Privacy Rule exception has been demonstrated. On 9/19/11, this Court conducted a bench trial in this no-fault action, wherein the parties stipulated to plaintiff’s prima facie case thus shifting the burden of proof to defendant insurer. In response to the Court’s inquiry whether defense counsel had a HIPAA authorization executed by assignor Shalina Akter (“Akter”), defense counsel conceitedly replied that he neither had one nor required one. Defense counsel argued HIPAA was inapplicable to a no-fault action, but did not cite any statutory or regulatory scheme to allow disclosure of Akter’s identifiable confidential health information in a public civil trial.

The Privacy Rule (45 CFR Titles 160 and 164) promulgated by the United States Department of Health and Human Services under authority granted in the Health Insurance Portability and Accountability Act (“HIPAA”) (Pub. L. No. 104-991, 110 US Stat 1936, codified in various titles of the United States Code) prohibits the disclosure of an identifiable patient’s medical record in a public civil judicial proceeding without the patient’s authorization, subject to certain exceptions (45 CFR §164.508; Matter of Miguel M., 17 NY3d 37, rearg den __NY3d __, 2011 NY Slip Op 86319). The Privacy Rule contains exemptions for disclosure of confidential health records where: 1) the information is to be exchanged for billing purposes (45 CFR [*2]§164.506); 2) in a workers’ compensation action (45 CFR §164.512 [1]); or 3) submission of a claim to an arbitration panel (45 CFR §164.506). None of these scenarios are present herein.^[FN1] HIPAA regulations can be pre-empted upon a demonstration that state law offers “more stringent” protections (see, HIPAA §264 [c][2]; Privacy Rule 45 CFR §160.203 [b]), but none was shown by counsel, nor found to exist herein by this Court.

The Privacy Rule authorizes disclosure of health information, subject to certain conditions, “in the course of any judicial or administrative proceeding,” in a response to “an order of a court or administrative tribunal” (45 CFR §164.512 [e][1][i]) or “a subpoena, discovery request or other lawful process” (45 CFR § 164.512 [e][1][ii]). The Privacy Rule also contains an exception for subpoenas and the like. This exception is conditioned on the demonstration of “satisfactory assurance,” from the party seeking the information, of compliance with the elements set forth in 45 CFR §165.512 (e)(1)(iii). Due to defendant’s position that HIPAA did not apply to no-fault actions, it intentionally failed to avail itself of the above-noted procedures under the Privacy Rule. The Court notes that plaintiff’s counsel never offered nor acknowledged if its office had ever obtained a HIPAA authorization from its assignor or exchanged one with opposing counsel.

Previously, this Court had repeatedly informed defendant’s law firm, among others, of the need to comply with the HIPAA statute’s authorization prerequisites.^[FN2] While HIPAA does not create a private cause of action for those aggrieved (see, 65 CFR §2566), failure to comply with HIPAA and the Privacy Rule can result in imposition of federal civil and criminal penalties (42 USC §1320d-5). These fines and penalties range from as low as $100 per incident/annual maximum of $25,000 for repeat violations for negligent disclosures, to $50,000 per violation with annual maximum of $1.5 million for uncorrected wilful negligent violations; along with fines of up to $250,000 and imprisonment for up to 10 years where unauthorized identifiable health information has been intentionally used for “commercial advantage” (see, American Recovery and Reinvestment Act of 2009, Public L. No. 111-5). The mere “inconvenience” to the insurer or assignee of first party no-fault benefits does not justify disregarding the confidentiality interest protected by HIPAA and the Privacy Rule. Accordingly, this Court imposes the judicially sanctioned remedy of exclusion of proposed medical testimonial evidence (Matter of Miguel M., supra [medical records obtained in violation of HIPAA or the Privacy Rule and the information contained in those records were deemed inadmissible in a proceeding to compel assisted outpatient treatment]), in the absence of a HIPAA authorization or compliance with the Privacy Rule exceptions. [*3]

In light of the stipulation between the parties, the exclusion of any proposed defense medical testimony on the issue of medical necessity and the lack of any other evidence submitted in opposition to plaintiff’s prima facie case, the Clerk of the Court is directed to enter judgment in favor of plaintiff against defendant insurer GEICO Insurance Company in the sum of $1346.76 with statutory interest, cost and fees as of 5/29/08.

This constitutes the Decision and Order of this Court.

Dated:11/3/11_______________________

Jose A. Padilla, Jr.

Judge of the Civil Court

Footnotes

Footnote 1:“The maxim expression unius est exclusio alterius is applied in the construction of the statutes, so that where a law expressly describes a particular act, thing or person to which it shall apply, an irrefutable inference must be drawn that what it omitted or not included was intended to be omitted or excluded,” (NY Statutes §240). Since HIPAA explicitly exempts pre-authorization in workers compensation and arbitration cases but made no exemption for no-fault actions, the only inescapable conclusion is that Congress did not mean to exclude no-fault benefits related actions from HIPAA or the Privacy Rule.

Footnote 2: Defense counsel’s reliance on the NYS Department Insurance Opinion Letter, dated July 8, 2003, is misplaced as that letter’s analysis and conclusion dealt primarily with HIPAA’s inapplicability in a workers’ compensation setting.

[*1]

Civil Court of the City New York, Queens County, October 6, 2011

APPEARANCES OF COUNSEL

Lewin, Goodman & Baglio, LLP, Melville (Brendan Kearns of counsel), for plaintiff. Rossillo & Licata, P.C., Westbury (Susan Schenck of counsel), for defendant.

{**34 Misc 3d at 377} OPINION OF THE COURT

Carmen R. Velasquez, J.

A bench trial was held before this court on August 19, 2011 in this action by the plaintiff to recover no-fault benefits for chiropractic services provided to Dana Schepanski. At the trial, Dr. Daniel Sposta, D.C., testified on behalf of the defendant and the plaintiff, Dr. John Kraft, D.C., testified on his own behalf. The parties also stipulated to the admission of the peer review report and underlying medical documents. After reviewing and assessing all of the evidence, including the testimony of the witnesses and the exhibits introduced by the parties, the court renders the following decision:

Plaintiff, Dr. John Kraft, D.C., as assignee of Dana Schepanski, seeks payment for chiropractic services, consisting of manipulation under anesthesia of the spine and hips, provided on July 28, 2009. At trial the parties stipulated to plaintiff’s prima facie case of no-fault entitlement and to the timeliness and propriety of defendant’s denial of the claims that are the basis of this action. The parties further stipulated that the sole issue to be determined by this court was the medical necessity of the chiropractic manipulation under anesthesia (MUA) performed by plaintiff.

Plaintiff’s assignor, Dana Schepanski, had been involved in a motor vehicle accident on October 28, 2008, which left her with headaches, neck pain radiating to the shoulders and lower back pain radiating to the left buttocks and hip region. After several months of chiropractic care, physical therapy and pain medication, assignor’s progress had plateaued. Medical progress notes dated from November 2008 to January 2009 consistently denoted her functional status as no greater than fair with continuing pain, spasms and tightness. On January 28, 2009, plaintiff, as co-surgeon, performed five manipulations of the assignor’s spine and hip joints while she was under anesthesia. On March 27, 2009, defendant, State Farm Mutual Automobile Ins. Co., denied payment of all services rendered by plaintiff on January 28, 2009.

Although the parties stipulated that the only issue before this court was the medical necessity of the disputed services, the defendant, both at trial and in the explanation of review, contended that an MUA performed on the hip joint is outside the scope of chiropractic service. Also raised, tangentially, was the frequently encountered contention that a chiropractor is not authorized to perform MUA procedures.{**34 Misc 3d at 378}

[*2]Whether manipulation under anesthesia is a procedure exceeding the scope of lawful chiropractic service is not an issue of first impression for this court. In an unpublished decision, dated July 23, 2010, this court found that chiropractors were authorized to perform manipulations of the spine under anesthesia and awarded judgment to the chiropractor who performed the manipulations and to the chiropractor who assisted him (Lezamiz v Nationwide Mut. Ins. Co., index No. CV-021277/08; Palumbo v Nationwide Mut. Ins. Co., index No. CV-035624/08). The New York State Workers’ Compensation Board, which supplies the fee structure by which the procedures at issue are to be compensated, has also consistently authorized chiropractors to perform manipulations under anesthesia (Employer: Solomon Schecter Day School, 2006 WL 3889159, 2006 NY Wrk Comp LEXIS 11146 [WCB No. 2040 8277]; Employer: Eckerd Drugs, 2008 WL 922458, 2008 NY Wrk Comp LEXIS 2647 [WCB No. 4060 1307]; Employer: Aramak, 2009 WL 456874, 2009 NY Wrk Comp 535411 [WCB No. 0053 5411]; see also John Giugliano, DC, P.C. v Merchants Mut. Ins. Co., 29 Misc 3d 367 [Civ Ct, Kings County 2010]).

The relevant statute, Education Law § 6551 (1), provides that

“The practice of the profession of chiropractic is defined as detecting and correcting by manual or mechanical means structural imbalance, distortion, or subluxations in the human body for the purpose of removing nerve interference and the effects thereof, where such interference is the result of or related to distortion, misalignment or subluxation of or in the vertebral column.”

In light of its unambiguous language, the statute must be given its literal meaning (see Matter of Encore Coll. Bookstores v Auxiliary Serv. Corp. of State Univ. of N.Y. at Farmingdale, 87 NY2d 410, 418 [1995]; Roth v Michelson, 55 NY2d 278, 283 [1982]). Nothing in the language of this statute, which defines chiropractic practice, suggests that lawful manipulations performed by chiropractors on conscious patients become unlawful once those patients are sedated. However, another subdivision of the Education Law provides that the holder of a chiropractic license is not permitted “to prescribe, administer, dispense or use in his practice drugs or medicines.” (Education Law § 6551 [3].) Nevertheless, as the State Education Department has acknowledged in a letter dated September 18, 2007, the Education Law does not prohibit a chiropractor from{**34 Misc 3d at 379} performing spinal manipulations on patients who are under anesthesia, although the chiropractor cannot administer the anesthesia. Therefore, manipulation under anesthesia is within the lawful scope of chiropractic services provided that, as in this case, the anesthesia utilized for the procedure is administered by a licensed professional and not by the chiropractor.

Defendant’s claim that Education Law § 6551 (1) does not permit the holder of a chiropractic license to treat a hip joint lacks merit. The statute limits the purpose of chiropractic treatment but not its scope. It allows treatment of the “human body,” without qualifying the term “human body” so as to preclude treatment of a particular part thereof. The only requirement is that the purpose of treatment be the removal of nerve interference and its effects resulting from or related to “distortion, misalignment or subluxation of or in the vertebral column.” Thus chiropractors licensed in the State of New York may treat any part of the human body, including the hip joint, provided that treatment is for the purpose stated in Education Law § 6551 (1). In fact, the New York State Workers’ Compensation Board has specifically authorized a chiropractor to perform manipulation of the bilateral hip areas under anesthesia, when the stated purpose was to break up fibrous adhesions and [*3]scar tissue that had formed on and around the claimant’s spinal column (Employer: Aramak, 2009 WL 456874, 2009 NY Wrk Comp 535411).

The defendant does not contend and has introduced no evidence that the MUA of the hip joints conducted on plaintiff’s assignor was for a purpose other than alleviating nerve interference related to the vertebral column. The medical records of plaintiff’s assignor indicate she had back pain, which radiated to the hip area, and the diagnosis codes in the explanation of review include closed dislocation of the sacrum. The sacrum is the segment of the vertebral column that articulates the hip bone on either side (Stedman’s Medical Dictionary [26th ed], sacrum at 1566). Therefore, based on the trial evidence, the court finds that the MUA of the hip joints performed by the plaintiff was related to the vertebral column and within the scope of lawful chiropractic practice as defined in the Education Law.

In support of the lack of medical necessity defense, defendant’s witness, Dr. Sposta, testified that plaintiff failed to meet three requirements: (1) chiropractic patients must seek a second opinion before undergoing an MUA procedure; (2) a chiropractor co-surgeon prior to performing an MUA must review the{**34 Misc 3d at 380} patient’s medical records; (3) pursuant to protocols established by the National Academy of MUA Physicians (NAMUA), MUA is only appropriate where conventional manipulation could not be performed due to pain, apprehension, muscle contraction or muscle splinting.

Dr. Sposta cited no authority to support his contention that a second opinion is necessary before an MUA procedure is performed on a chiropractic patient. As Dr. Kraft testified, the New York State Workers’ Compensation Board medical treatment guidelines contain no such requirement. As for plaintiff’s alleged failure to personally review the patient’s medical records prior to the MUA, even if established it would be insufficient, on its own, to rebut the presumption of medical necessity. Finally, while there is no evidence that plaintiff’s assignor was incapable of withstanding conventional manipulation, NAMUA protocol does not limit the availability of the MUA procedure to this criteria. As per NAMUA, patients whose conditions justify MUA include those “whereby manipulation of the spine or other articulations is the treatment of choice, however, due to the extent of the injury mechanism, conservative manipulation has been minimally effective in 2-6 weeks of care and a greater degree of movement of the affected joint(s) is needed.” (NAMUA National Guidelines http://www.namuap.org/mcms/mua/content.cfm?pulldata=scmscontent.cfm & entity_id=8&content_id=180 [accessed Sept. 15, 2011].) The assignor’s treatment prior to the MUA in this case well exceeded such minimum. Her medical records reveal that she was not a surgical candidate and had received several months of conservative care with little to no improvement, thereby justifying the MUA procedures performed by plaintiff.

The court finds that the plaintiff, as a licensed chiropractor, was authorized to perform the disputed manipulations under anesthesia and that the defendant has failed to rebut the presumption of medical necessity of these procedures by a fair preponderance of the credible evidence. Accordingly, verdict in favor of the plaintiff, Dr. John Kraft, D.C., in the amount of $1,594.10 (the agreed disputed amount) with statutory interest, attorney fees, costs and disbursements.

Civil Court of the City of New York, Kings County

089993/09

Michael Weaver, Esq.

Bruno, Gerbino & Soriano, LLP

Attorneys for Defendant

445 Broad Hollow Road, Suite 220

Melville, NY 11747

631-390-0010

Law Offices of Melissa Betancourt, P.C.

Attorney for Plaintiff

155 Kings Highway, 3rd Floor

Brooklyn, New York 11223

718-336-8076

Lisa S. Ottley, J.

This action was commenced by the Plaintiff seeking payment of no-fault party benefits for services rendered on behalf of Sara Mounier pursuant to CPLR 5106(a) of the Insurance Law and Regulation of the New York State Insurance Department (11 NYCRR Sect. 65-1.1 et. seq.).

Defendant moves for an order pursuant to CPLR §3025(b), for leave to amend its Verified Answer, and upon this court granting defendant leave to amend its answer, for dismissal of the complaint pursuant to CPLR §3211(a) 5, under the doctrines of res judicata and collateral estoppel.

Discussion

Leave to amend a pleading pursuant to CPLR 3025(b) should be granted where there is no significant prejudice or surprise to the opposing party and where the proof submitted in support of the motion indicates that the amendment may have merit. See, Edenwald Contr. Co. v. City of New York, 60 NY2d 957 [1983].

Based upon the documents submitted in support of its motion for leave to amend its Verified Answer, the court hereby grants defendant’s motion to amend its Verified Answer. See, Uptodate Medical Service, P.C., v. State Farm Mutual Automobile Insurance Company , 22 Misc 3d 128(A), 880 N.Y.S.2d 227 (AT 2nd, 11th & 13th Judicial Dists., 2009).

Next, this court will address the issue as to whether defendant is entitled to dismissal of the action on the grounds of res judicata and collateral estoppel.

In the case at bar, the defendant-insurer brought an action in Supreme Court, Nassau County, seeking declaratory relief by the filing of a Summons and Complaint which the court deemed to have been duly served upon all the defendants named within the action, which failed to appear and/or interpose or serve an answer in the action. [See, Exh. “A” annexed to defendant’s moving papers herein]. By notice of motion, the defendant herein, and the plaintiff in the Supreme Court action moved pursuant to CPLR § 3215 for an order and judgment granting plaintiff the relief sought upon default, which was granted by the Hon. Anthony L. Parga, on October 1, 2010.

The defendant moves for dismissal of this action for payment of no-fault benefits [*2]on the grounds of res judicata and collateral estoppel, inasmuch as the declaratory judgment held that no coverage existed due to the fact the loss resulted from a staged accident.

Plaintiff argues, that a declaratory judgment granted on default does not have preclusive effect, and therefore, collateral estoppel does not preclude a party from litigating the action.

Although there is case law in support of plaintiff’s argument, the cases in support of plaintiff’s argument are distinguishable from this case. As argued by defendant, in Magic Recovery Med & Surgical Supply, Inc. v. State Farm Mutual Auto Insurance Company, 27 Misc 3d 67, 901 N.Y.S.2d 774 (AT 2nd, 11 & 13th Jud. Dists., 2010), the insurance company failed to name the party in the declaratory action, therefore, the res judicata and collateral estoppel could not be granted. In EMA Acupuncture, P.C. v. Lumbermens Mutual Casualty Company, 27 Misc 3d 141, 911 N.Y.S.2d 692 (AT 2nd, 11 & 13th Jud. Dists., 2010), which was not the basis of a default declaratory judgment, but was based on whether an Order issued on default pursuant to CPLR §3216 which fails to specify whether the dismissal is with prejudice or on the merits, has a preclusive effect.

Recently, this Court in a decision by the Hon. Devin P. Cohen, denied defendant’s motion to dismiss on the ground of collateral estoppel. As in this case, the motion raised the question of the effect of a declaratory judgment order, issued on default with respect to collateral actions seeking to litigate the same issue. Judge Cohen provides a detailed analysis of the applicable law and policies underlying declaratory judgments, collateral estoppel and default judgments. See, Beford Medical Care, P.C., a/a/o Vincent Meyers v. Encompass Insurance Company, 31 Misc 3d 222, 915 N.Y.S.2d 452 [Civ. Ct., Kings Co., 2011].

Interestingly, however, the decision does not address the doctrine of res judicata. Perhaps, the defendant in that case, did not move for dismissal on the ground of res judicata.

The doctrines of res judicata and collateral estoppel are designed to put an end to a matter once it is duly decided. See, Siegel, NY Practice §442 at 747 [4th Ed.]. Res judicata, or claim preclusion, is invoked when a party, or one in privity with the party, seeks to relitigate a disposition on the merits of claims, or causes of action, arising out of the same, or series of, transactions which were raised, or could have been raised, in the [*3]

prior action. See, Matter of Hunter, 4 NY3d 260 [2005]. Res judicata applies “when a different judgment in the second [action] would destroy or impair rights or interests established by the first. See, Matter of Hunter, 4 NY3d 260 [2005]; Schuykill Fuel Corp. v. Nieberg Realty Corp., 250 NY 304.

In SZ Medical, P.C., Life Chiropractic, P.C., JH Chiropractic, P.C., New Wave Oriental Acupuncture, P.C., a/a/o Clinton Charles v. Erie Insurance Company, 24 Misc 3d 126(A), 889 N.Y.S.2d 884 [AT 2nd, 11th & 13th Judicial Dists., 2009], the court affirmed the dismissal of the case on the lower level, and held the following:

The determination as to whether there was coverage is crucial to both

plaintiffs and defendant herein, and arises out of the same transaction,

i.e., the subject accident (see e.g. Abraham v. Hermitage Ins. Co., 47

AD3d 855 [2008]; Sabatino v. Capco Trading, Inc., 27 AD3d 1019,

1020 [2006]), and a different judgment in the instant action would

destroy or impair rights or interests established by the Supreme

Court judgment (see, e.g. Schuykill Fuel Corp. v. Nieberg Realty

Corp., 250 NY at 306-307). Moreover, the record established that

defendant and the wholly owned subsidiary had the requisite privity

(see, e.g. Spasiano v. Provident Mut. Life Ins. Co., 2 AD3d 1466

[2003]). Consequently, plaintiffs were barred from relitigating the

claim pursuant to the doctrine of res judicata.

Thereafter, the First Department in Pomona Medical Diagnostics, P.C., a/a/o Jarrod Ward v. Metropolitan Casualty Ins. Co., 29 Misc 3d 138(A), 920 N.Y.S.2d 243 (1st Dept., 2010), citing SZ Medical, P.C., Life Chiropractic, P.C., JH Chiropractic, P.C., New Wave Oriental Acupuncture, P.C., a/a/o Clinton Charles v. Erie Insurance Company, 24 Misc 3d 126(A), 889 N.Y.S.2d 884 [AT 2nd, 11th & 13th Judicial Dists.], reversed the lower court’s denial of defendant’s motion for summary judgment, and held: “Contrary to plaintiff’s claim, the Supreme Court judgment is a conclusive final determination, notwithstanding that it was entered on default of plaintiff, since res judicata applies to a judgment taken by default that has not been vacated (see, Trisingh Enters., Inc., v. Kessler 249 AD2d 45 [1998]; Robbins v. Growney, 229 AD2d 356 [1996].

Herein, the plaintiff-provider, as determined by the Supreme Court, was duly served with the Summons and Complaint in the declaratory action, and therefore, judgment was entered in favor of the defendant-insurer, on October 1, 2010, due to the [*4]provider’s failure to serve and file an answer to the Summons and Complaint. There is nothing in the record to indicate that the plaintiffs, Altercare, et .al., have moved to vacate the default judgment in the Supreme Court.

Accordingly, defendant’s motion to dismiss on the ground of res judicata is hereby granted.

This constitutes the order of this Court.

Court Attorney to notify.

Dated: Brooklyn, New York

August 30, 2011

______________________________

LISA S. OTTLEY, A.J.S.C.

[*1]

Civil Court of the City of New York, Kings County, July 7, 2011

APPEARANCES OF COUNSEL

Law Office of Teresa M. Spina, Woodbury (Dominick Dale of counsel), for defendant. Gary Tsirelman, P.C., Brooklyn (Wesley Mead of counsel), for plaintiff.

{**32 Misc 3d at 716} OPINION OF THE COURT

Genine D. Edwards, J.

In the instant actions for no-fault benefits, bench trials were held on April 13, 2011 and April 14, 2011. After establishing how the bills were created and given to Israel & Israel for [*2]mailing, plaintiff’s witness, Vladmir Grinsberg, could not set forth how the bills were mailed. Mr. Grinsberg instead offered that the denial of claims indicated defendant received the bills. Plaintiff’s counsel contended that the defendant’s denial of claim forms were admissible as party admissions for the limited purpose of proving the bills were mailed and received. Defendant objected and argued that plaintiff has to lay a foundation for the admission of the denial of claim forms. Hence, a directed verdict should be rendered in defendant’s favor in all three actions.

This court requested post-trial memoranda regarding the admissibility of the defendant’s denial of claim forms as party admissions for the limited purpose of establishing that plaintiff mailed its bills to the defendant.

After due deliberation of the evidence adduced at trial, as opposed to documents annexed to a summary judgment motion, this court adheres to the Appellate Term’s ruling that denial of claim forms shall be admitted into evidence only upon the laying of a business record foundation. (Bath Med. Supply, Inc. v Utica Mut. Ins. Co., 23 Misc 3d 141[A], 2009 NY Slip Op 51030[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Bajaj v General Assur., 18 Misc 3d 25 [App Term, 2d Dept 2007].) Besides testifying that he received the denial of claim forms, Mr. Grinsberg failed to proffer any evidence to authenticate the denial of claim forms.

Accordingly, defendant’s motions for directed verdict in each of the three actions are granted because plaintiff failed to shoulder its prima facie burden.